Tampa, Fla.-based WellCare Health Plans completed its $800 million acquisition of White Plains, N.Y.-based Universal American.
Under the agreement, Universal American will become a wholly-owned subsidiary of WellCare. Universal American shareholders will receive $10.00 cash for each share of common stock, bringing the total transaction value to approximately $800 million.
Officials expect the sale to be $0.60 to $0.70 accretive in the first-year following closing, with an incremental $0.10 accretive in the second year following closing. The value excludes the one-time $30 million in transaction-related expenses and integration costs worth approximately $25 million to $30 million.
WellCare officials said they will provide more details about the sale during the company's first quarter 2017 earnings call May 3.
As part of the agreement, Universal American's chairman and CEO Richard Barasch, JD, will depart from his executive roles with the insurer.
"This transaction strengthens our business by increasing our Medicare Advantage membership by a third, deepening our presence in two key markets — Texas and New York — and diversifying our business portfolio," said Ken Burdick, JD, CEO of WellCare Health Plans. "We also welcome Universal American employees, members, agents, and providers to WellCare. WellCare and Universal American have a shared commitment to serving Medicare beneficiaries, and we look forward to working together to ensure a smooth transition."