Foundation Health Corp. and Intergroup Healthcare Corp. Merger Creates Nation's Leading Managed Care Organization

Strategic Insights -

The merger between Foundation Health Corp. and Intergroup Healthcare Corp. has created one of the nation's leading managed care organizations, with operations in 15 states and the United Kingdom. The combined companies offer managed health care products in multiple regions, with total revenues of nearly $2.4 billion for the 12 months ended June 30, 1994. The merger expands the geographic reach of Foundation Health Corp., making it a multi-regional managed care organization.

Key Takeaways:

  • The merger between Foundation Health Corp. and Intergroup Healthcare Corp. creates one of the nation's leading managed care organizations, with operations in 15 states and the United Kingdom.
  • On a pro forma basis, the combined companies had total revenues of nearly $2.4 billion for the 12 months ended June 30, 1994.
  • The merger expands the geographic reach of Foundation Health Corp., making it a multi-regional managed care organization.
  • The combined companies offer managed health care products in multiple regions, including Arizona, California, Colorado, Florida, Louisiana, Nebraska, Nevada, New Mexico, Texas, and Utah, as well as the United Kingdom.
  • The merged entity has health maintenance organization (HMO) licenses pending in Alabama and Oklahoma and specialty services or government-sponsored managed care programs in Hawaii, Massachusetts, Oregon, Tennessee, and Washington.
  • Daniel D. Crowley, president and chief executive officer of Foundation Health Corp., stated that the company is known for its diversity of high-quality managed care products and ability to serve many types of customers through various funding arrangements.
  • Rick Barrett, president of Intergroup, stated that the future belongs to health care companies that focus on serving customers with quality, affordable health care services, which is the goal at the center of the new enterprise created by the merger.
  • 1.9316 shares of Foundation Health common stock or 0.26 share of a special preferred stock will be issued to each share of Intergroup stock.

Statistics:

  • Total revenues of the combined companies: nearly $2.4 billion for the 12 months ended June 30, 1994.
  • Number of states with operations: 15, including the United Kingdom.
  • Share of Foundation Health common stock or preferred stock issued to each Intergroup stock: 1.9316 common shares or 0.26 share of preferred stock.
  • Number of common shares of Foundation Health Corp. outstanding upon completion of the transactions: approximately 56.7 million.

Sources:

  • Business Wire (November 1, 1994)
  • Foundation Health Corp. press release (November 1, 1994)