Health Net — SPAC Merger (July 2015)
18 slides from Health Net's SPAC merger presentation, Jul 15, 2015
Slide 1: Centene + Health Net
Filed by Centene Corporation Pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended Subject Company: Health Net, Inc. Commission File No.: 1-12718 This filing relates to the previously disclose
Slide 2: Safe Harbor Statement
Safe Harbor Statement Cautionary Statement Regarding Forward-Looking Statements This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of Centene, Health Net and the combined businesses of Centene and Health Net and certa
Slide 3: Safe Harbor Statement: Additional Information and Where to Find It
Safe Harbor Statement Additional Information and Where to Find It The proposed merger transaction involving Centene and Health Net will be submitted to the respective stockholders of Centene and Health Net for their consideration. In connection with the proposed merger, Centene will prepare a regist
Slide 4: Earnings Guidance Policy
Earnings Guidance Policy Our Company’spolicy is, “that the Companyundertakesno obligation to update its earnings guidance,other than as part of its quarterly or yearly earningsdisclosure,and that silence on guidanceby the Companyor Companyofficials should not be interpreted that guidancehas or hasno
Slide 5: Enhanced Capabilities for Delivering High Quality, Affordable Healthcare
Enhanced Capabilities for Delivering High Quality, Affordable Healthcare + = 1. Growth in 2017 and beyond 2. Critical mass 3. Increased capabilities 4. Pro Forma 2015E Premium & Service Revenue of $37B 5. Pro Forma 2015E Adj. EBITDA in excess of $1.5B 5
Slide 6: Growth Drivers
Growth Drivers • Deeper Penetration in California (Largest Medicaid State, Segment Size: 12 Million) o Medicaid 1.7 M members o Medicare over 265K members o Exchange nearly 300K members o Duals Demo 27K members o Prison Health 125K eligibles • Medicare Advantage across Centene States o Over 65% of M
Slide 7: Key Transaction Terms
Key Transaction Terms $28.25 in cash plus 0.622 shares of Centene Purchase st Implies$78.57perHealthNet sharebasedon July1 close Price Total transaction value of $6.8B, including assumption of Health Net debt Centene shareholders to own ~71% of Company and Health Net shareholders to own Ownership ~2
Slide 8: $150M in Year 2 Cost Synergy Opportunities
Cost Synergy Opportunities Core G&A Efficiencies Specialty Company Integration $150M Medical Costs in Year 2 Technology Platform On Top of Cognizant Savings Savings Are Incremental to Growth Opportunity 8
Slide 9: Critical Mass: Leader in High Quality Affordable Plans
Critical Mass: Leader in High Quality Affordable Plans Pro Forma Membership as of 3/31/15 Medicaid: 5.7 million Specialty / Government:3.1 million Commercial / Exchanges: 1.3 million Medicare: 275,000 Duals: 40,000 Total 10.4 million Centene Health Net Common States Note: Map excludes Health Net’s T
Slide 10: Diversifying and Setting the Stage for 2016 and Beyond
Diversifying and Setting the Stage for 2016 and Beyond + 4% 4% 4% 8% 4% 11% 0.7% 8% 2% 19% 39% 83% 16% 34% 64% 2015E Revenue: 2015E Revenue: 2015E Pro Forma Revenue: $21 billion $16 billion $37 billion Medicaid Commercial / Exchanges Medicare Specialty / Government Duals Note: Estimate of revenue re
Slide 11: Significant and Real Growth Opportunities
Significant and Real Growth Opportunities Enhanced Introduces Increased Additional Opportunity for Leverage Commercial Leader in Medicare Government Targeted Specialty Group Medicaid Advantage Health Exchange Platform Business Presence Programs Populations National 4 Star Plans Leader in VA Depth an
Slide 12: Increased Addressable Segments by Product
Increased Addressable Segments by Product Medicaid & CHIP $612B Medicare $689B $1.4 Health Insurance Marketplace $104B trillion Correctional $9B Healthcare 12
Slide 13: US Health Care Public Financing
US Health CarePublic – Financing 191 million Millions of Beneficiaries (56% of Americans) 172 million (52% of Americans) 5 134 million 5 21 (42% of Americans) 14 5 7 72 CHIP 62 50 Exchange Medicare Medicaid 91 93 72 Source: HMA, 2014 2014 2019 2024 13
Slide 14: Opportunity for Deeper Penetration in Segment
Current Pipeline Medicaid Health Insurance & CHIP Marketplace Medicare Correctional (Duals) Healthcare Opportunity for Deeper Penetration in Segment $140 billion (Note: this figure does not include additional Medicare Advantage in CNC States) 14
Slide 15: Centene Has Delivered Growth Since 2008
CenteneHas Delivered Growth Since 2008 HEALTHCARE COVERAGE SOLUTIONS Government Solutions AZ FL GA IN OH SC TX WI Low-Income Medicaid CHIP ABD (non duals) 8 ABD (dual-eligible) or Dual Demonstrations States Long-Term Services and Supports Foster Care Medicare Special Needs Plan 70 Specialty Health S
Slide 16: Combination Creates Increased Product Diversity Across a Broader Footprint
Combination Creates Increased Product Diversity Across a Broader Footprint (Pro Forma 2015) 1 Government Solutions AZ AR CA FL GA IL IN KS LA MA MI MN MS MO NH OH OR SC TN TX VT WA WI TANF Medicaid Expansion CHIP ABD (non-duals) ABD (Medicaid onlydual-eligibles) Dual Demonstrations Intellectually/De
Slide 17: Enhanced Capabilities for Delivering High Quality, Affordable Healthcare
Enhanced Capabilities for Delivering High Quality, Affordable Healthcare Leading position in Government programs: Medicaid, Medicare, VA and TRICARE Scale in Government PF 2015E Premium & Service Revenue of $37B and Adj. EBITDA in excess of $1.5B Programs Opportunity to leverage specialty programs P
Slide 18: Centene + Health Net
a CENTENE. orporation Centene+ Health Net