HARTFORD, Conn., May 24, 2007 — Aetna (NYSE: ΑET) announced today that it has entered into an agreement to acquire Schaller Anderson, Incorporated, a leading provider of health care management services for Medicaid plans. Schaller Anderson also manages commercial self-funded health plans and behavioral health services in select markets. The privately held company is based in Phoenix.
The purchase price is approximately $535 million. Aetna will finance the acquisition with available resources. The transaction is subject to customary closing conditions, including federal Hart-Scott-Rodino antitrust regulatory approval. Aetna expects to close the transaction during the third quarter of 2007, and that it will become accretive to earnings during 2008.
"This acquisition provides Aetna with a premier provider of medical management services with more than 20 years of experience working with the Medicaid population," said Ronald A. Williams, Aetna chairman and CEO. "It fits Aetna’s acquisition strategy by improving our local market presence in state and federal programs while strengthening our ability to improve quality and manage medical costs. The addition of Schaller Anderson also demonstrates our dedication to finding ways to serve the uninsured and underinsured segments of our population."
"Schaller Anderson is very excited to be joining Aetna," said Joseph Anderson, chairman and CEO. "We believe that Schaller Anderson’s strategy of providing high-quality care services to populations with medically complex and expensive medical conditions through our operational and clinical expertise fits well with Aetna’s value proposition. We believe our 20-year history of serving Medicaid beneficiaries can be a tremendous asset to Aetna."
Schaller Anderson’s wholly owned subsidiaries provide health plan services in eight states — Arizona, California, Delaware, Maine, Maryland, Missouri, New Hampshire and Texas. In Delaware and Missouri, Schaller Anderson operates risk-bearing health plans in fully funded HMO arrangements. The company also provides consulting services to the state of Tennessee’s Medicaid program. Founded in 1986, Schaller Anderson has approximately 1,800 employees. Upon closing, the combined Medicaid businesses of Aetna and Schaller Anderson will be based in Phoenix.
Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 34.9 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life, long-term care and disability plans, and medical management capabilities. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans and government-sponsored plans. www.aetna.com
ADDITIONAL INFORMATION; CAUTIONARY STATEMENT -- Certain information in this press release is forward looking, including, but not limited to, the projected earnings accretion and other future growth and benefits projected to be realized from this transaction and the expected timing of the closing. Forward-looking information is based on management’s estimates, assumptions and projections, and is subject to significant uncertainties and other factors, many of which are beyond Aetna’s and Schaller Anderson’s control. Important risk factors could cause actual future results and other future events to differ materially from those currently estimated by management. Those risk factors include, but are not limited to: the ability to successfully develop and integrate the business operations described herein in a timely and cost-efficient manner (including obtaining the required regulatory approvals on a timely basis to close the transaction and operate the business); the ability to realize projected revenue and cost and expense synergies; the ability to retain current membership of Schaller Anderson and grow its membership in the future; retention of key personnel of Schaller Anderson; failure of medical management companies to improve health care outcomes; and adverse government regulation or review.