trending Market Intelligence /marketintelligence/en/news-insights/trending/ynflgo8ugwjpumgobja-5w2 content
BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
PRIVACY & COOKIE NOTICE
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *

* Required

In this list

Universal American pursued close to a dozen acquirers before WellCare deal

L.K. Bennett: Bankruptcy Case Study

State Of Singapore Online Video Subscription

Power Forecast Briefing: Capacity Shortfalls to Test the Renewable Energy Transition

Episode 43 - More Change, M&A On Horizon For Equity Research Industry


Universal American pursued close to a dozen acquirers before WellCare deal

Months before WellCare Health Plans Inc. agreed in principle to acquire Universal American Corp. for $10.00 per common share in an all-cash deal, the White Plains, N.Y.-based insurance underwriter pursued close to a dozen potential acquirers as part of a comprehensive strategic review process.

According to a Dec. 21 filing detailing the background of the pending deal, Universal American and its representatives contacted 11 potential bidders, including WellCare, to gauge their interest in acquiring its Texas Medicare Advantage business, as well as the company as a whole. By January 2016, four companies indicated a willingness to pursue a transaction, the filing shows, while a lone bidder, identified as "Party B," expressed interest in pursuing a whole company transaction.

At the time, Party B provided a verbal indication to pursue a whole company transaction in a range between $6.75 per share and $7.25 per share in cash, according to the filing. Meanwhile, WellCare and two other parties, identified as "Party C" and "Party D," expressed interest in acquiring the Texas business within a range of $350 million to $425 million. The proposed price for Universal American's common shares in the whole company transaction with WellCare implies an equity value of $600 million, the companies said in a Nov. 17 joint statement.

During second-round indications in March, Party B upped its bid for the whole company to $567.60 million, or $7.00 per share, contingent on the consummation of the sale of Universal American's traditional insurance business. In the same round, Party C indicated interest in pursuing a taxable Texas business transaction valued at approximately $350 million, or $4.08 per share. On April 5, Party B increased its offer for a whole company transaction to $7.20 per share, while removing the contingency related to the traditional insurance business.

By early May, Party B reduced its offer to $6.80 per share, citing concerns related to litigation surrounding Universal American's 2012 acquisition of APS Healthcare Inc. Universal American's board decided not to accept the price and terms of Party B's offer at a meeting May 9, while Party B indicated that it was unwilling to increase the value of its offer, the filing shows.

On Sept. 6, WellCare made an unsolicited inquiry about acquiring Universal American. During October and November, WellCare conducted due diligence and, after revisions to a draft agreement, the parties executed the merger Nov. 17 and issued a joint press release announcing the transaction.