In another move to expand its East Coast presence, Health Systems International, a managed-care company with most of its operations concentrated in the West, said it has reached an agreement to acquire M.D. Enterprises of Connecticut in a deal valued at $101 million.
Under the pact, Health Systems International will issue new shares of its Class A stock to MDEC stockholders. The transaction is expected to close by year-end, subject to regulatory and MDEC stockholders' approval.
North Haven, Conn.-based MDEC is the parent of M.D. Health Plan, an independent practice association HMO formed in 1987 and the state's third-largest HMO, with 113,026 enrollees.
Earlier this year, Health Systems International signed a letter of intent to acquire a majority interest in Integrated Health Networks, a Philadelphia-based managed-care company, which operates a PPO in the Greater Philadelphia-southern New Jersey region (May 16, p. 8).
Health Systems, with headquarters in Pueblo, Colo., and Woodland Hills, Calif., operates HMOs with 1.4 million enrollees in six Western states. It also owns Preferred Health Network, a 2.7 million-enrollee PPO, and two insurance companies.