EXHIBIT 99.2
[HEALTHSPRING LOGO]
Company Contact: J. Gentry Barden, Esq.
Senior Vice President & General Counsel
HealthSpring, Inc.
(615) 401-4531
HEALTHSPRING ANNOUNCES AGREEMENT TO ACQUIRE
FLORIDA MEDICARE HMO
NASHVILLE, Tenn. (May 30, 2006) - HealthSpring, Inc. (NYSE:HS) today
announced that it has entered into an agreement to acquire all of the
outstanding capital stock of America's Health Choice Medical Plans, Inc.
("America's Health Choice" or "AHC"), a Florida-licensed HMO currently operating
Medicare Advantage health plans in Brevard, Broward, Indian River, Martin,
Okeechobee, Palm Beach, and St. Lucie counties. An affiliate of AHC operates 33
medical clinics in and around the same seven county area. For the year ended
December 31, 2005, America's Health Choice generated approximately $150 million
in revenue and, as of April 30, 2006, had approximately 13,000 enrolled Medicare
Advantage members and approximately 800 members in its stand-alone prescription
drug plan.
Pursuant to the terms of the purchase agreement, HealthSpring will pay the
stockholders of America's Health Choice $50.0 million in cash, subject to an
escrow for balance sheet adjustments and post-closing indemnification. The
closing of the acquisition, which is expected to occur late in the third quarter
or early in the fourth quarter of 2006, is subject to a number of usual and
customary conditions, including the approval of The Centers for Medicare and
Medicaid Services ("CMS") and Florida insurance regulators.
HealthSpring also announced that it will manage the operations of
America's Health Choice prior to closing for a monthly management fee. The terms
of the management agreement are subject to review by Florida insurance
regulators. It is currently contemplated by the parties that the management
agreement would be terminated if the acquisition of AHC by HealthSpring were not
completed.
Immediately prior to the closing of the acquisition, America's Health
Choice will transfer assets and liabilities relating to the operations of the 33
medical clinics to an affiliate. In conjunction with the sale of AHC, the
medical clinic affiliate has agreed to provide or arrange for substantially all
medical services for HMO members on a "global capitation" basis. HealthSpring
has negotiated an option agreement, exercisable until June 30, 2007, to purchase
substantially all of the assets of the medical clinics.
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HS to Acquire America's Health Choice Medical Plans
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May 30, 2006
Herb Fritch, President and Chief Executive Officer of HealthSpring,
commented: "We are extremely pleased to announce the signing of the agreement to
acquire AHC and enter the Florida market. AHC's membership profile, geographic
footprint, and provider relationships are very attractive. The Florida Medicare
market is primed with growth opportunities, given its expanding
Medicare-eligible population, its high reimbursement rates, and the relative
under-penetration by Medicare Advantage plans in much of AHC's service areas.
Moreover, with our medical management focus and operational expertise, we
believe we can achieve better healthcare outcomes for AHC members, while at the
same time achieving cost efficiencies. We expect that the acquisition, when
completed, will be accretive to HealthSpring's earnings."
ABOUT HEALTHSPRING, INC.
HealthSpring, Inc. is one of the largest managed care organizations in the
United States whose primary focus is the Medicare Advantage market. The Company
currently owns and operates Medicare Advantage and stand-alone Medicare
prescription drug plans in Tennessee, Texas, Alabama, Illinois, and Mississippi.
In addition, the Company uses its infrastructure and provider networks in
Tennessee and Alabama to offer commercial health plans to employer groups.
ABOUT AMERICA'S HEALTH CHOICE MEDICAL PLANS, INC.
Based in Vero Beach, Florida, America's Health Choice Medical Plans, Inc.
is a privately held Medicare Advantage HMO that was formed in July 2000. The
Company has distinguished itself among other Medicare Advantage HMOs in terms of
its ability to contain medical costs while providing its members with
comprehensive health care and pharmacy benefits. America's Health Choice serves
the health care needs of over 13,000 Medicare recipients in Brevard (zip codes
32949 and 32976), Broward, Indian River, Martin, Okeechobee, Palm Beach, and St.
Lucie counties.
America's Health Choice is subject to regulatory sanctions issued by CMS
in July 2005. Pending administrative review, CMS temporarily lifted marketing
and enrollment restrictions effective May 1, 2006, and America's Health Choice
renewed its marketing efforts directed toward the Medicare population in its
seven-county Florida service area.
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HS to Acquire America's Health Choice Medical Plans
Page 3
May 30, 2006
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
Statements contained in this release that are not historical fact may be
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). HealthSpring intends such
statements to be covered by the safe harbor provisions for forward-looking
statements contained in Section 21E of the Exchange Act. Statements that are
predictive in nature, that depend on or refer to future events or conditions, or
that include words such as "anticipates," "believes," "could," "estimates,"
"expects," "intends," "may," "plans," "potential," "predicts," "projects,"
"should," "will," "would," and similar expressions are forward-looking
statements. Such statements include statements regarding the timing for the
closing of the transaction; the conditions to closing of the acquisition and
required regulatory approvals; the requirement for regulatory review of the
management agreement; the exercisability of the option agreement relating to
the medical clinic assets; Florida market growth opportunities; potential
post-acquisition member healthcare outcomes and cost efficiencies; and the
impact of the acquisition on HealthSpring's earnings. Forward-looking statements
involve known and unknown risks, uncertainties, and other factors that may cause
HealthSpring's actual results, performance, or achievements to be materially
different from any future results, performance, or achievements expressed or
implied by the forward-looking statements, including risks and uncertainties
associated with the regulatory approval process, including the termination of
CMS marketing and enrollment sanctions and other administrative actions;
HealthSpring's ability to identify risks and potential liabilities in its due
diligence review of the books, records, and operations of AHC; HealthSpring's
inexperience in the Florida market and with AHC's provider networks;
HealthSpring's ability to manage and integrate successfully the operations of
AHC post-acquisition, achieve operating efficiencies, and grow membership as
anticipated; and the ability of AHC affiliates to operate the medical clinics in
accordance with the agreements.
Additional information concerning important risks and uncertainties can be
found under the headings "Special Note Regarding Forward-Looking Statements" and
"Item 1A. - Risk Factors" in HealthSpring's Annual Report on Form 10-K for the
year ended December 31, 2005 and under the heading "Item 1A. - Risk Factors" in
HealthSpring's Quarterly Report on Form 10-Q for the quarter ended March 31,
2006, as each are filed with the Securities and Exchange Commission. Except as
required by law, HealthSpring assumes no obligation to update any
forward-looking statement publicly, or to update the reasons actual results
could differ materially from those predicted in any forward-looking statement,
even if new information becomes available in the future.
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