Subsequent Events

6 Months Ended

Jun. 30, 2017

Subsequent Events

Subsequent Events

NOTE F—Subsequent Events

On July 13, 2017, the Company entered into an agreement and plan of merger (“the SWH Agreement”) to acquire SWH Holdings, Inc. (“Senior Whole Health”). Senior Whole Health is a healthcare company focused on serving complex, high-risk populations, providing Medicare and Medicaid dual-eligible benefits to members in Massachusetts and New York. Under the terms of the SWH Agreement, the base purchase price is $390.0 million, subject to working capital adjustments, plus a potential contingent payment of $10.0 million. The contingent payments are based on a subsidiary of SWH Holdings earning a Star Rating from Medicare of 4.0 or greater in 2018. Consummation of the merger is subject to various conditions, including state regulatory approvals and the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Act. The Company anticipates funding the acquisition from the proceeds of new debt offerings.

On July 13, 2017, in connection with the Company’s acquisition of Senior Whole Health, the Company secured committed financing for up to $400.0 million at closing under a bridge facility (the “SWH Bridge Facility”). Proceeds from the SWH Bridge Facility may only be used by the Company to fund the acquisition and pay associated transaction costs. If utilized, the SWH Bridge Facility will be guaranteed by substantially all of the non-regulated subsidiaries of the Company and mature 364 days after the closing date of the acquisition.