MERIGROUP to Acquire New Jersey Medicaid Business, Sell Medicaid Business in South Carolina
November 20, 2008
VIRGINIA BEACH, VA – November 20, 2008 – AMERIGROUP Corporation (NYSE:AGP) announced today that it plans to purchase certain assets from Centene Corporation, principally the right to provide managed care services to Centene’s Medicaid members in New Jersey. In a related transaction, AMERIGROUP plans to sell certain assets to Centene, principally the right to provide managed care services to AMERIGROUP’s Medicaid members in South Carolina. At the end of the third quarter of 2008, AMERIGROUP Community Care of South Carolina served 9,000 members in South Carolina and Centene served 54,900 members in New Jersey through its wholly-owned subsidiary, University Health Plans, Inc.
The transactions are subject to separate approvals by regulatory authorities in the states of New Jersey and South Carolina.
This transaction allows us to bolster our presence and improve services to members in one of our original states, said James G. Carlson, AMERIGROUP Chairman and Chief Executive Officer. The operations of our New Jersey health plan are solid. We believe we can effectively address the health needs of the additional members there and at the same time achieve operating efficiencies. We remain convinced that South Carolina is committed to a viable managed care program, but the current environment does not offer us the opportunity to reach adequate scale in a timely manner. Nevertheless, we believe this arrangement is beneficial to everyone.
Financial terms of the transactions were not disclosed. Each transaction will close upon the approval of regulators in the respective State, which is expected in the first quarter of 2009. The net effect of the transactions is expected to be slightly accretive in 2009.
AMERIGROUP’s wholly-owned subsidiary in New Jersey currently serves approximately 103,000 people enrolled in publicly-funded healthcare programs such as Medicaid.
About AMERIGROUP Corporation
AMERIGROUP Corporation, headquartered in Virginia Beach, Virginia, improves healthcare access and quality for the financially vulnerable, seniors and people with disabilities by developing innovative managed health services for the public sector. Through its subsidiaries, AMERIGROUP Corporation serves approximately 1.7 million people in Florida, Georgia, Maryland, New Jersey, New Mexico, New York, Ohio, South Carolina, Tennessee, Texas and Virginia.
For more information, visit www.amerigroupcorp.com.
