HealthSpring, Inc. Completes Acquisition of Bravo Health, Inc.
Company also Announces Addition of Jeffrey Folick to Board of Directors
NASHVILLE, TN (November 30, 2010) HealthSpring, Inc. (NYSE:HS) today announced that it has completed the previously announced acquisition of Bravo Health, Inc., an operator of Medicare Advantage coordinated care plans in Pennsylvania, the Mid-Atlantic region, and Texas, and Medicare Part D stand-alone prescription drug plans in 43 states and the District of Columbia.
HealthSpring acquired Bravo Health, a privately held company, for approximately $545.0 million in cash. The transaction was funded by the use of cash on hand and borrowings under an amended revolving credit and new term loan facility. As amended, the facility consists of the following:
Outstanding loans under the new credit facility bear interest at a spread over LIBOR (initially 375 basis points for term loan A and revolver indebtedness and 450 basis points for term loan B indebtedness), which spread changes depending on the Companys total leverage ratio. With respect to the term loan B indebtedness, the terms of the facility include a contractual minimum LIBOR of 1.5%.
HealthSpring expects the Bravo Health acquisition to be immediately accretive to earnings, after accounting for expenses related to the transaction in the 2010 fourth quarter. Except for such expenses, HealthSprings previous financial guidance for the year ending December 31, 2010, excludes any impact on earnings from Bravo Health operations.
HealthSpring also announced that Jeffrey Folick, the former chairman and chief executive officer of Bravo Health, has joined its Board of Directors. Since 2006, Mr. Folick had been the chairman and chief executive officer of Bravo Health. For over twenty years prior to 2006, he served in various executive roles for a number of different managed care organizations, including Health Net, Inc. and PacifiCare Health Systems.
HS Completes Acquisition of Bravo Health, Inc.
I am pleased that Jeff has accepted our invitation to join the HealthSpring Board following the completion of our acquisition of Bravo Health, said Herbert A. Fritch, Chairman of the Board and Chief Executive Officer of HealthSpring. I have known Jeff for more than 20 years, and his extensive background in managed care operations will be of tremendous value as we integrate Bravo Health and as we address the challenges of health insurance reform. I know we will greatly benefit from his continued service to our combined organizations.
Cautionary Statement Regarding Forward Looking Statements
The following factors, among others, could cause actual results to differ materially from those in the forward-looking statements: risks and uncertainties associated with the regulatory approval process; HealthSprings lack of prior experience in Bravo Healths service areas; and HealthSprings ability to manage and integrate successfully the operations of Bravo Health post-acquisition, achieve operating efficiencies, and maintain and grow membership as anticipated. The foregoing list of factors is not intended to be exhaustive. Additional information concerning these and other important risks and uncertainties can be found under the headings Special Note Regarding Forward-Looking Statements and Item 1A. Risk Factors in the Companys Annual Report on Form 10-K for the year ended December 31, 2009, and in other public filings by the Company.