HealthAxis.com Assures Investors of Merger and Revenue Potential

Strategic Insights -

HealthAxis.com, a unit of Provident American Corp., has clarified that the losses reported by its UICI's credit-card division on December 9 would not affect its merger with UICI's subsidiary, Insurdata Inc. The company is planning to trade under the Healthaxis.com name and apply for a new trading symbol after the merger approval. HealthAxis wanted to assure investors that the losses were an "isolated" incident and would not impact the company's performance, especially considering its other thriving businesses.

Key Takeaways:

  • HealthAxis.com's merger with Insurdata Inc. is still on schedule to close next month, with both parties committing 100% to the transaction.
  • The combined company will operate under the Healthaxis.com name and is expected to be one of the largest players in the Web-enabled health insurance space, with estimated revenues of $42 million.
  • Shareholders of both companies will own about 50% of the new combined company.
  • The merger will not be affected by the $79 million pretax loss reported by UICI's credit-card division in the fourth quarter.
  • HealthAxis.com's parent company, Provident American Corp., reported a net loss of $23 million for the third quarter and a revenue drop to a loss of $6.7 million.
  • HealthAxis distributes health and life insurance to individual and small group markets and does not engage in insurance underwriting, thus assuming no risks.
  • The company's stock, listed as "PAMC" on the Nasdaq stock market, was trading at $28.875 a share on Monday afternoon, down 3.75% from Friday's close.

Statistics:

  • $42 million: Estimated revenues of the combined company in the Web-enabled health insurance space.
  • 50%: Share of ownership by shareholders of both HealthAxis.com and Insurdata Inc. in the new combined company.
  • $79 million: Pretax loss reported by UICI's credit-card division in the fourth quarter.
  • $23 million: Net loss reported by Provident American Corp. for the third quarter.
  • $6.7 million: Revenue drop to a loss from a profit of $18.5 million in the year-ago period for Provident.
  • 50%: Ownership stake of both companies in the new combined entity.

Sources:

  • BestWire (December 7, 1999): Quotes Craig Gitlitz, senior vice president at HealthAxis.com.
  • BestWire (December 7, 1999): States that both companies' shareholders will own about 50% of the new combined company.
  • BestWire (November 19, 1999): Reports a net loss of $23 million for the third quarter and a revenue drop to a loss of $6.7 million for Provident.
  • HealthAxis.com (no date): Provides information about the company's merger with Insurdata Inc. and its plans to trade under the Healthaxis.com name.
  • COMTEX (http://www.comtexnews.com): Provides news services for HealthAxis.com and other companies.