Centene Corporation (NYSE: CNC) announced Wednesday that it would acquire privately owned Fidelis Care and enter into New York, sending Centene shares 6 percent higher. Under the terms of the agreement, Centene will acquire Fidelis for $3.75 billion.
Fidelis is a non-profit corporation that offers 1.6 million Americans affordable health insurance plans such as Medicaid, Child Health Plus, Essential Plan, and others. The company has generated $4.8 billion in revenue for the first half of the fiscal year.
The acquisition of Fidelis will help expand Centene’s government sponsored healthcare as well securing a leadership position in New York, the second largest care state by membership in the country. With this acquisition, this will secure Centene’s position in the country by managing the top four care states: California, Florida, Texas, and now New York.
Centene now estimates total revenue for 2018 to be approximately $60 billion. The company states that’ll it be a revenue growth opportunity as well being able to expand its portfolio of health plans.
"We believe our over 30 years of experience, our local approach to the provision of healthcare, and our expertise and capabilities in caring for underserved populations will support the next generation of leadership in government programs in New York State," said Michael F. Neidorff, Chairman, President and CEO of Centene.
“Through this transaction we can further enhance the well-being of Fidelis Care's members and continue to build linkages and systems for the coordination of care and services among healthcare, behavioral and social services while doing so at an appropriate level of cost,” said Neidorff.
The merger is expected to close by the first quarter of the 2018 fiscal year.