WOONSOCKET, R.I., Dec. 31, 2010 /PRNewswire-FirstCall/ — CVS
Caremark (NYSE:
CVS) today announced it has entered into an agreement to
acquire the Medicare Part D business of Universal American (NYSE:
UAM) for approximately $1.25 billion. Universal American
is a leading Medicare Prescription Drug Plan (PDP) sponsor
based in Rye Brook, New York. The acquisition will more than double
the size of CVS Caremark’s Medicare Part D program. Universal
American’s Part D business currently serves approximately 1.9
million Medicare PDP members, while CVS Caremark serves
approximately 1.2 million Medicare PDP members. This reflects
current levels of membership and does not include 2011 auto
assignment or the results of the Annual Enrollment Period which
will end on December 31, 2010.
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“Today’s transaction furthers CVS Caremark’s position as a
significant player in one of the nation’s fastest growing segments
of the Pharmacy Benefit Management industry. A growing portion of
the country’s population will receive their prescription drug
coverage under Medicare plans, driven both by age demographics and
the anticipated shift of retirees from employer based coverage to
Medicare that will likely result from health care reform,” said Per
Lofberg, President of Caremark Pharmacy Services. “The
Medicare Part D program is integral to CVS Caremark’s long-term
growth strategy. We believe that bringing together these two
businesses will strengthen our competitive offerings, enabling us
to provide Medicare beneficiaries with expanded products and
services and lower the cost of pharmacy care.”
CVS Caremark said the transaction will be accretive to earnings
per share in its first full year. The company continues to be
hig
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