Combination will strengthen CVS Caremark's position in fast growing Medicare market; Focus to turn to integration and providing beneficiaries the best service
WOONSOCKET, R.I., April 28, 2011 /PRNewswire/ -- CVS Caremark (NYSE: CVS) today announced it expects to complete the acquisition of the Medicare Part D business of Universal American on Friday, April 29, 2011. As previously announced, CVS Caremark will pay Universal American shareholders cash consideration of $1.25 billion plus the excess capital in the entities that operate Universal American's Medicare Part D business, less Universal American's outstanding trust preferred securities, which are being assumed by CVS Caremark. Upon closing, CVS Caremark and Universal American will begin working to integrate the two businesses' Medicare Prescription Drug Plans (PDPs), which will more than double the size of CVS Caremark's Medicare Part D program.
"This transaction will make CVS Caremark a top provider of service in Medicare Part D, one of the nation's fastest growing health care segments," said Per Lofberg, president of CVS Caremark Pharmacy Services. "This acquisition will strengthen our business and allow us to expand products and services to Medicare beneficiaries while we work to lower the cost of pharmacy care."
CVS Caremark continues to expect the acquisition to be approximately eight cents ($0.08) accretive to adjusted earnings per share in 2011. This acquisition is consistent with the company goal of investing in core businesses that help drive growth and improve returns on invested capital. It is not expected to impact the company's previously announced dividend growth and share buyback initiatives, company officials said.
Medicare Part D is the federally subsidized prescription benefit program provided to Medicare beneficiaries, citizens who are 65 years and older or who otherwise qualify through disability. Prescription drug coverage funded by Medicare is projected to be one of the fastest growing segments of the PBM market, given the nation's aging demographics and the growing trend to transition retiree coverage to Medicare funding.
About CVS Caremark
CVS Caremark is the largest pharmacy health care provider in the United States with integrated offerings across the entire spectrum of pharmacy care. We are uniquely positioned to engage plan members in behaviors that improve their health and to lower overall health care costs for health plans, plan sponsors and their members. CVS Caremark is a market leader in mail order pharmacy, retail pharmacy, specialty pharmacy, and retail clinics, and is a leading provider of Medicare Part D Prescription Drug Plans. As one of the country's largest pharmacy benefits managers (PBMs), we provide access to a network of approximately 65,000 pharmacies, including more than 7,100 CVS/pharmacy® stores that provide unparalleled service and capabilities. Our clinical offerings include our signature Pharmacy Advisor™ program as well as innovative generic step therapy and genetic benefit management programs that promote more cost effective and healthier behaviors and improve health care outcomes. General information about CVS Caremark is available through the Company's Web site at http://info.cvscaremark.com/.
This press release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company strongly recommends that you become familiar with the specific risks and uncertainties outlined under the Risk Factors section in our Annual Report on Form 10-K for the year ended December 31, 2010 and under the section entitled "Cautionary Statement Concerning Forward-Looking Statements" in our most recently filed Quarterly Report on Form 10-Q.
SOURCE CVS Caremark Corporation