Centene Corporation · NYSE:CNC
Centene — Merger or Acquisition (January 2021)
18 slides from Centene's merger presentation, Jan 4, 2021
Slide 1: CENTENE + Magellan
CENTENE + Magellan orporat lon HEALTH.. January 4, 2021
Slide 2: Cautionary Statement on Forward-Looking Statements of Centene
Cautionary Statement on Forward-Looking Statements of Centene All statements, other than statements of current or historical fact, contained in this presentation are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as “believe,” “anticipate,
Slide 3: Important Additional Information and Where to Find It
Important Additional Information and Where to Find ItIn connection with the Magellan Transaction, Magellan Health intends to file with the SEC a proxy statement for its stockholders (the “Proxy Statement”). Magellan will send the Proxy Statement to its stockholders and may file other documents regar
Slide 4: Earnings Guidance Policy
Earnings Guidance Policy Our Company’s policy is “that the Company undertakes no obligation to update its earnings guidance, other than as part of its quarterly or yearly earnings disclosure, and that silence on guidance by the Company or Company officials should not be interpreted that guidance has
Slide 5: Participants
Participants Michael F. NeidorffChairman & Chief Executive Officer, CenteneKenneth J. FasolaChief Executive Officer, MagellanSarah LondonSVP Technology, Innovation and Modernization and President, Health Care Enterprises, CenteneJeffrey A. SchwanekeExecutive Vice President, Chief Financial Officer,
Slide 6: Establishing a Leader in Behavioral Health and Specialty Health
Establishing a Leader in Behavioral Health and Specialty Health One of the nation’s largest behavioral health platformsCentene + Magellan will provide behavioral services for 41mm U.S. members Manages fastest-growing, most complex areas of health associated with behavioral health conditionsExpands c
Slide 7: Magellan focuses on high cost and growing medical categories
Magellan focuses on high cost and growing medical categories Sources: 2012 National Library of Medicine Study Primary Care and Behavioral Health Practice Size: The Challenge for Healthcare Reform; Prevalence and medical costs of chronic diseases, Am J PrevMed, 2017;Drug Channels Institute “The 2019
Slide 8: Scaled Leadership and Capabilities in Behavioral Health
Source: Annals of Internal Medicine. Scaled Leadership and Capabilities in Behavioral Health Opportunity to Leverage Next Generation Approaches Behavioral health direct spend represents ~15-20% of a payer’s medical cost; however, overall medical cost increases 2-3x when there is a BH co-morbidityKey
Slide 9: Transaction Represents a Compelling Opportunity for All Magellan Stakeholders
Transaction Represents a Compelling Opportunity for All Magellan Stakeholders 9
Slide 10: Centene's Health Care Enterprises Core Operating Principles
Centene's Health Care Enterprises Core Operating Principles Innovative technology and service model companies Leverage scaled Centene membership and healthcare experience Focus on external market to maximize scalabilityIncentive to attract best-in-class talent and technologies Strictly independent g
Slide 11: Portfolio of High Value Specialty Offerings
Behavioral Specialty Pharmacy Technology, Data & Analytics Provider Centene Assets Magellan Assets Centene Minority Investment Magellan Minority Investment Magellan ConnectMagellan StrengthMagellan Spirit Magellan PBMMagellan Government RxMagellan Specialty Rx RadiologyCardiologyMSKPT/OT Portfolio o
Slide 12: Transaction Overview
Transaction Overview Purchase Price Financing $95 in cash per Magellan shareTotal transaction enterprise value of $2.2bn Financial Impact Closing Slightly accretive to adjusted EPS in the first full yearLow to mid-single digit percent adjusted EPS accretion projected by the second full year$50mm in
Slide 13: Highly Complementary to Centene Specialty Services Strategy
Source: Company Filings., projection models. Highly Complementary to Centene Specialty Services Strategy ($bn) Rev. CAGR: 18.0% Approx. $22bn of Revenue Through Solutions Across the Broad Spectrum of Care Leading pharmacy, wellness solutions and vision and dental benefitsExpands specialty offerings
Slide 14: Specialty Services third-party revenue
Specialty Services $17.8bn(1) $4.6bn Specialty Services Third Party Revenue (2020E) Third Party Customers $22.4bn(1) + Centene Plans Magellan transaction increases revenue from third-parties by 74% from $5.9bn to $10.3bn 1. 2020E pro forma for PantherRx. Specialty Services Specialty Services 14
Slide 15: Further Bolsters Pharmacy Capabilities
Further Bolsters Pharmacy Capabilities Large End Growth US Prescription Market ~4.5bn annual prescriptions filled per year(1)~6-15 annual prescriptions filled per person(1,2,3)~55% of Americans regularly take a prescription(4) Market leader in Medicaid FFSSignificant PBM growth opportunities with mi
Slide 16: Track Record of Successful, Larger Scale Integrations
Source: Factset, Company Website. 1. Represents value at announcement. Track Record of Successful, Larger Scale Integrations 2016 2018 2020 Transaction Value (1) $6.8bn $3.75bn $17.3bn We are experienced in acquiring businesses of scale and highly confident in our ability to successfully integrate t
Slide 17: Path to Long-Term Value Creation
Path to Long-Term Value Creation Expected to generate $50mm of annual net synergies by second full year Near-term synergies including medical costs efficiencies by leveraging Magellan capabilities across existing Centene portfolio, PBM consolidation, and G&A efficienciesLonger term opportunities inc
Slide 18: Combination Strengthens Our Platform
Combination Strengthens Our Platform Value creation and earnings accretion Deepens Centene's whole health capabilities Increases internal and external specialty benefit and pharmacy management capabilities Creates leader in behavioral health with significant scale and expertise Continued diversifica