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. Frances Werner-Watkins Julie Rinaldi
    News and notes on local businesses
  2. Left to right: Oak Hill Hospital Anesthesiology residents Daniel Eskander, Wayne Simmons, Jeffrey Huang and Benjamin Segil. Katie Stacy/Oak Hill Hospital
    News and notes on local businesses
  3. A total of 131 employees are scheduled to be laid off in January as Locale Market and Farm Table Cucina close at the Sundial to make way for a new food hall created by the developers of the Heights Public Market at the Armature Works in Tampa. CHRIS URSO   |   TIMES
    In a notice to the state of Florida, Sundial owner Bill Edwards said the layoffs are expected to take place the first week of January.
  4. WeWork is opening Tampa offices at 501 E Kennedy Blvd. despite company struggles, including $1.25 billion in losses over 2019. SCOTT KEELER  |  Tampa Bay Times
    WeWork has 200 planned coworking space openings as leadership tries to manage $1.25 billion in losses.
  5. Florida's unemployment rate was unchanged in October at 3.2 percent, according to numbers released Friday. LYNNE SLADKY  |  AP
    The latest numbers were released Friday morning.
  6. Apollo Global Management has offered $130 per share for Tech Data's stock in an acquisition worth $5.4 billion. If regulators shareholders approve, the home-grown company will remain based in Pinellas County, where it employs 2,000 of its 14,000 workers. DIRK SHADD  |  Tampa Bay Times
    Private equity firms like Apollo create wealth for pension funds, financial institutions and individual investors by buying assets that typically are sold later at a profit.
  7. Some of Tampa Bay's largest companies are being sold or are up for sale. Times files and Bloomin' Brands
    Tech Data is just the latest in a growing list of public companies bought up by out-of-state firms.
  8. Hillsborough Community College solicited "non-binding letters of interest or intent” last month from developers interested in purchasing the Dr. Gwendolyn W. Stephenson District Administration Center on Davis Islands. OCTAVIO JONES  |  Times
    Developers have eyed the 3.7 acre waterfront parcel for years, but recent interest has prompted the college’s trustees to finally start the conversation.
  9. Tampa International Airport looking north. The Wall Street Journal ranked it the best midsize airport in America. [Times files]
    TPA took first place in the Wall Street Journal’s annual survey of U.S. airports.
  10. Tech Data's CEO Rich Hume (left) shares a moment with former CEO Bob Dutkowsky during a send off celebration for Dutkowsky earlier this year. JIM DAMASKE   |   Times
    A private equity firm has agreed to buy Tech Data.
Advertisement
Advertisement
Advertisement