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Humana Inc. (NYSE: HUM) (“Humana”) and Metropolitan Health Networks, Inc. (NYSE: MDF) (“Metropolitan”) today announced that they have entered into a definitive agreement pursuant to which Humana will acquire Metropolitan in a transaction valued at approximately $850 million plus transaction costs. Headquartered in Boca Raton, Florida, Metropolitan is a Medical Services Organization that provides and coordinates medical care for approximately 87,500 Medicare Advantage, Medicaid, and other beneficiaries, primarily in Florida utilizing a primary care-centric business model.
Under the terms of the agreement, which has been approved by both companies’ boards of directors, Metropolitan stockholders will receive $11.25 per share in cash from Humana for each Metropolitan share. Humana will also repay all of Metropolitan’s outstanding debt.
“We believe firmly in Metropolitan’s proven integrated-care model and its demonstrated scalability to new markets," said Bruce Broussard, Humana’s President. "With this strategic acquisition, Humana will further expand our capabilities and help to simplify and improve the overall health care experience for our members.”
“In addition to providing significant value to our shareholders, today’s announcement is an important next step for the very talented and determined team of individuals in our wholly owned business units, MetCare and Continucare,” said Michael Earley, Chairman and Chief Executive Officer of Metropolitan Health Networks, Inc. “As a partner to Humana for over 13 years, Metropolitan has experienced incredible growth and success in providing health care solutions for customers in the Medicare and Medicaid markets. Joining forces with a national leading health care company such as Humana will provide us with the resources to more rapidly expand while continuing to provide the highest quality care to our patients,” Earley concluded.
Metropolitan’s integrated care delivery systems include 35 state-of-the-art primary care medical centers and a robust network of affiliated physicians serving mainly Humana members.
The transaction is subject to Metropolitan shareholder approval and customary closing conditions including expiration of the Hart-Scott-Rodino anti-trust waiting period and is expected to close by the end of the first quarter of 2013. Humana expects to finance this transaction with a combination of cash and debt. Humana anticipates the transaction to be modestly accretive to its earnings for the year ending December 31, 2013.