Centene Corporation · NYSE:CNC
Centene — Merger or Acquisition (July 2015)
18 slides from Centene's merger presentation, Jul 15, 2015
Slide 1: Centene + Health Net
Centene + Health Net July 15, 2015
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
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’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 ha
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 Implies $78.57 per Health Net share based on July 1st close Price Total transaction value of $6.8B, including assumption of Health Net debt Centene shareholders to own ~71% of Company and Health Net Ownership sharehol
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
Slide 10: Diversifying and Setting the Stage for 2016 and Beyond
Diversifying and Setting the Stage for 2016 and Beyond + 8% 4% 11% 4% 4% 4% 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 $612B & CHIP Medicare $689B $1.4 Health Insurance Marketplace $104B trillion Correctional $9B Healthcare 12
Slide 13: US Health Care – Public Financing
US Health Care – Public 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 62 CHIP Exchange 50 Medicare Medicaid 91 93 72 Source: HMA, 2014 2014 2019 2024 13
Slide 14: Current Pipeline: 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
Centene Has 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 ● ● Fost
Slide 16: Combination Creates Increased Product Diversity Across a Broader Footprint
Combination Creates Increased Product Diversity Across a Broader Footprint (Pro Forma 2015) Government Solutions AZ AR CA FL GA IL IN KS LA MA MI MN MS MO NH OH OR1 SC TN TX VT WA WI TANF ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Medicaid Expansion ● ● ● ● ● ● ● ● ● CHIP ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ABD
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 prog
Slide 18: Centene + Health Net
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