Advertisement
  1. Business

WellCare's $2.5 billion purchase of Meridian makes it the Tampa Bay area's biggest company by market cap

WellCare Health Plans is based on Henderson Road in Tampa. (Times files)
Published Sep. 4, 2018

TAMPA — WellCare Health Plans has closed on its biggest acquisition ever, a $2.5 billion purchase of three Midwestern health plans and, along the way, has become the Tampa Bay area's biggest company by market value.

WellCare, a Fortune 200 company that focuses on providing government-sponsored managed care services, has seen its market capitalization rise from less than $10 billion when the purchase of Meridian Health Plans was announced in May to $15.2 billion by the close of markets Tuesday. That put its market cap ahead of Raymond James Financial's $13.6 billion. Tech Data remains the largest company in the bay area — and Florida — by revenue.

The acquisition of Meridian's plans in Michigan and Illinois, plus its MeridianRx pharmacy benefits manager, puts WellCare in a position for further growth within government-sponsored programs, WellCare CEO Ken Burdick said in announcing that the deal had cleared all regulatory approvals.

"This transaction grows and diversifies our Medicaid membership by nearly 40 percent, increases our Medicare Advantage presence in new markets, adds a proprietary (pharmacy benefits manager) platform and enhances WellCare's integrated dual-eligible" — meaning patients who qualify for both Medicare and Medicaid — "and marketplace capabilities," he said.

Increasingly, insurers have been developing or buying pharmacy benefits manager programs to improve how they share data, manage care and control prescription drug costs. Meridian years ago created its own in-house program, which is now expected to help WellCare manage pharmacy costs and integrate pharmacy services and medical care — both of which could help lower costs.

The Meridian acquisition is expected to boost WellCare's adjusted earnings per share by 40 to 50 cents next year, ramping up to more than $1 in 2021. As part of its financing, WellCare said last month that it would sell more than 3.9 million shares of common stock to help raise money for the Meridian purchase. On Tuesday, WellCare's stock closed at $304.24 a share, up about half a percent.

FINANCING THE DEAL: WellCare selling common stock and borrowing to raise cash for Meridian purchase

Meridian, now a wholly owned subsidiary of WellCare, was one of the nation's largest privately-held, for-profit managed care organizations, with about 1.1 million members in Medicaid, Medicare Advantage, integrated dual-eligible and health insurance marketplace programs in Michigan, Illinois, Indiana and Ohio. WellCare has 4.4 million members nationwide.

MORE: Go here for more Business News

Contact >Richard Danielson

ALSO IN THIS SECTION

  1. Sam's Club fulfillment center manager Nick Barbieri explains to a shopper how the new Scan & Go shop works at 5135 S Dale Mabry Highway. SARA DINATALE  |  Tampa Bay Times
    The shuttered store has been reinvented and debuted to the community.
  2. Yogi Goswami
    The Molekule Air Mini is a scaled-down version of its original purifier.
  3. 580 Corporate Center in Oldsmar Jones Lang LaSalle Capital Markets
    The six-building center is 91 percent occupied.
  4. Florida has a newly-appointed task force to analyze the state's cybersecurity health. Pictured is Florida's Old Capitol building in March. [SCOTT KEELER   |   Times] SCOTT KEELER  |  Tampa Bay Times
    A Legislature-created task force convenes this month to begin its year-long assessment.
  5. Yesterday• Business
    The Cross Bay Ferry, Provincetown III leaves the Vinoy Yacht Basin in January with passengers headed to Tampa. For departure times and fares for this season, which will go from Nov. 1 through April 30, check thecrossbayferry.com. [SCOTT KEELER | Times] SCOTT KEELER  |  Tampa Bay Times
    Now in its third year, the ferry will run Wednesdays through Sundays, with service for every Tampa Bay Lightning home game.
  6. The Doc Webb house, which became a point of contention over its historic status. LUIS SANTANA  |  Tampa Bay Times
    The City Council will vote on amended regulations about third-party designation meant to quell verbal and legal skirmishes over historic preservation
  7. Ken Jones, CEO of Third Lake Capital, has sold WingHouse for $18 million to a Jacksonville restaurant company. [Times 2016]
    Tampa’s Third Like Capital now major shareholder in restaurant’s new owners.
  8. The Don CeSar Hotel is caught up in a lawsuit over liquid nitrogen being served and causing injuries at its restaurant. [Times (2011)]
    They say the other side has made inflammatory and misleading statements to the media.
  9. This Mobil Coast gas station at 16055 State Road 52 in Land O Lakes is one of 10 cited in a Florida Department of Environmental Protection lawsuit where inspectors said they found lapses in regularly required tests, maintenance, documentation or other oversight by Brandon-based Automated Petroleum and Energy or its related companies. On Wednesday, the company said the station had already been put back in compliance with state regulations. (Photo via Google street view) Google street view
    The Florida Department of Environmental Protection contends Automated Petroleum and Energy Company failed to do required maintenance or testing at 10 gas stations in the Tampa Bay area and beyond.
  10. FILE - In this July 31, 2019, file photo workers clean the outside facade of State Farm Stadium in Glendale, Ariz. On Wednesday, Oct. 16, the Federal Reserve releases its latest ‘Beige Book’ survey of economic conditions. ROSS D. FRANKLIN  |  AP
    “Persistent trade tensions and slower global growth” were weighing on the economy, the Federal Reserve reported.
Advertisement
Advertisement
Advertisement