Metropolitan Health Networks Enters into Definitive Agreement to Acquire Two Additional Primary Care Practices
Metropolitan Health Networks, Inc. () (the “Company”), a leading provider of health care services in Florida, today announced that its wholly owned subsidiary, MetCare of Florida, Inc. (“MetCare”), has entered into a definitive agreement to acquire certain assets and assume certain liabilities of Kanner, Shteiman, LLC. (“Kanner, Shteiman”), an entity that owns two physician practices that currently provide services to MetCare patients under contractual arrangements with the Company.
Kanner, Shteiman is owned and operated by Dr. Steven Kanner and Dr. Alexander Shteiman. Dr. Kanner is a board certified internal medicine physician and a subspecialist certified in geriatric medicine. Dr. Shteiman, a board certified internal medicine physician with over 25 years of experience, joined the practice 12 years ago. The partnership has developed two successful, high quality primary care practices that serve the Palm Beach market. Kanner, Shteiman and its employees have served MetCare customers for over a decade, and its practices currently serve over 1,100 Humana Medicare Advantage members. Kanner, Shteiman’s Humana membership is already included in MetCare’s customer base. In addition to the Humana plan members, these practices provide care to several thousand customers not included in the MetCare customer count. These include commercial, Medicaid, and Medicare patients. Terms of the transaction, which is expected to close within 90 days, were not disclosed.
Commenting on the acquisition, Jose A. Guethon, MD, MBA, President and Chief Operating Officer of Metropolitan Health Networks, Inc., stated, “We are very pleased to announce that Drs. Kanner and Shteiman have agreed to become full-time members of the MetCare team. These physicians have built successful practices that have served MetCare and other customers in the Palm Beach area very well. By joining MetCare they will be able to leverage the resources of our entire organization as they continue to deliver quality health care services to their patient base.”
“Acquiring Kanner Shteiman’s practices is in keeping with MetCare’s goal of increasing its number of wholly-owned primary care centers. We have been actively pursuing these types of practices and will continue to do so. Through the deployment of our model of care, the strength and efficiency of our administrative infrastructure, and our health care IT systems, we believe we can deliver continued increases in patient outcomes and satisfaction with these acquisitions, while also driving both top and bottom line growth for the Company overall. These types of acquisitions also provide us access to the built-in growth potential of a practice whose fee-for-service patient panel, specifically those outside of the existing Humana Medicare customer base, is significant,” Guethon concluded.
Metropolitan is a growing health care company that provides and coordinates comprehensive health care services for Medicare Advantage, Medicaid, and other customers through its primary care-centric businesses, MetCare of Florida, Inc., Continucare Corporation, and Symphony Health Partners, Inc. Metropolitan currently owns and operates 33 medical centers and contracts with a network of independent primary care practices. To learn more about Metropolitan Health Networks, Inc. please visit its website at .
Except for historical matters contained herein, statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as “will,” “expect” and “believe” or the negative other variations thereof or comparable terminology are intended to identify forward-looking statements. Examples of forward-looking statements contained in this press release include, among others, statements we make regarding the expected timing for the closing of the acquisition of Kanner, Shteiman; the ability of Kanner, Shteiman’s physicians to leverage the resources of our organization; the strategic benefits to us that we believe may result from the acquisition; and our intention to continue to continue to pursue acquisitions of independent physician practices.
Investors and others are cautioned that a variety of factors, including certain risks, may affect our business and cause actual results to differ materially from those set forth in the forward-looking statements. These risk factors include, without limitation: (i) the impact of our significantly increased levels of indebtedness on our funding costs, operating flexibility and ability to fund ongoing operations with additional borrowings, particularly in light of ongoing volatility in the credit and capital markets; (ii) our ability to operate pursuant to the terms of our debt obligations; (iii) our ability to integrate the acquired operations of Continucare Corporation and to realize the anticipated revenues, economies of scale, cost synergies and productivity gains in connection with the merger and any other acquisitions that we may undertake, as and when planned, including the potential for unanticipated issues, expenses and liabilities associated with those acquisitions and the risk that Continucare fails to meet its expected financial and operating targets; (iv) the potential for diversion of management time and resources in seeking to integrate the operations of Continucare Corporation; (v) our ability to successfully establish a presence in new geographic markets and the risks involved in our geographic expansion efforts; (vi) our ability to meet our cost projections under various provider agreements with Humana, Inc.; (vii) our ability to reach an agreement to amend our new Medicare Advantage payor contract, pursuant to which we have realized certain operating losses to date, on favorable terms; (viii) our failure to accurately estimate incurred but not reported medical benefits expense; (ix) pricing pressures exerted on us by managed care organizations and the level of payments we indirectly receive under governmental programs or from other payors; (x) our still limited ability to predict the direct and indirect effects of the health care reform laws adopted in 2010; (xi) future legislation and changes in governmental regulations; (xii ) the impact of Medicare Risk Adjustments on payments we receive for our managed care operations; and (xiii) a loss of any of our significant contracts or our ability to increase the number of Medicare eligible patient lives we manage under these contracts. We are also subject to the risks and uncertainties described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2011, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.