Metropolitan Health Networks to acquire Continucare

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Florida-based healthcare organization Metropolitan Health Networks and primary care physician services provider Continucare have entered into a definitive merger agreement whereby Metropolitan will acquire Continucare in a cash and stock transaction valued at approximately $416 million at the time of announcement.

The combined company will own 31 primary care practices and will operate in 18 Florida counties, including the Daytona, Miami-Ft. Lauderdale, West Palm Beach and Tampa metropolitan areas, according to Boca Raton, Fla.-based Metropolitan Health Networks.

Under the terms of the merger agreement, owners of Continucare common stock will receive $6.25 per share in cash, and 0.0414 of a share of Metropolitan common stock, which, based on the share price at the time of announcement, is equal to approximately 20 cents. The exact value of the consideration per share will depend on Metropolitan’s share price at closing. Metropolitan expects to issue approximately 2.7 million shares in connection with the pending transaction, stated Continucare, based in Miami.

The combined company will have approximately $660 million in annual revenue, based on Metropolitan Health Networks' and Continucare's respective results for the 12 months ended March 31, and more than $90 million in earnings before interest, taxes, depreciation and amortization (EBITDA) for the same period.

Metropolitan projects annual cost savings, principally from elimination of public company-related expenses as well as the elimination of certain executive-level positions. The transaction will be accretive in 2012, Metropolitan added.