Amerigroup Corp., Virginia Beach, Va., agreed to pay $107 million and possibly make additional incentive payments to acquire 114,000-member CarePlus Health Plan, one of New York City's largest for-profit Medicaid managed-care companies. The deal -- expected to close in early 2005 pending regulatory approval -- would be Amerigroup's 10th acquisition and give it entry to its sixth state. Amerigroup would gain $200 million in annual revenue, increase annual per-share earnings by 15 cents to 20 cents and boost its total enrollment to 1 million members. "A key part of Amerigroup's growth strategy is to move into major urban areas by acquiring other health plans, and New York has been at the top of our list," Amerigroup Chairman and Chief Executive Officer Jeffrey McWaters said in a news release.
Amerigroup currently covers 902,000 beneficiaries of public health programs in the District of Columbia, Florida, Illinois, Maryland, New Jersey and Texas. The deal comes less than a month after rival Centene Corp. announced plans to pay $93 million for FirstGuard, which covers 136,000 Medicaid members in Kansas and Missouri. -- by Laura B. Benko