SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 1, 1996
UNITED HEALTHCARE CORPORATION
(Exact name of registrant as specified in charter)
MINNESOTA
(State or other jurisdiction of incorporation)
0-13253 41-1321939
(Commission File Number) (IRS Employer Identification
No.)
300 Opus Center, 9900 Bren Road East, Minnetonka, MN 55343
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 936-1300
<PAGE>
Item 5. Other Events
On February 1, 1996, United HealthCare Corporation ("United"), announced that
it entered into an Agreement and Plan of Merger on February 1, 1996 with
HealthWise of America, Inc. ("HealthWise") to acquire HealthWise (the
"Agreement"). Upon the terms and subject to the conditions set forth in the
Agreement, a wholly owned subsidiary of United will merge with and into
HealthWise (the "Merger"). As a result of the Merger, the separate corporate
existence of the subsidiary will cease and HealthWise will continue as the
surviving corporation of the Merger and a wholly owned subsidiary of United.
HealthWise, which is based in Nashville, Tennessee, owns and operates health
maintenance organizations in Maryland, Kentucky, Tennessee and Arkansas with
current enrollment of approximately 154,000 members. In addition, HealthWise
has recently received an HMO license in Virginia and is expanding its
Maryland operations into Washington, D.C.
Under the terms of the Agreement, United will issue up to approximately 4.6
million shares of common stock in exchange for all outstanding equity
ownership and stock options in HealthWise, with each outstanding share of
common stock of HealthWise being converted into 0.6475 of a share of common
stock of United. The agreement was negotiated at arms-length.
The closing is subject to customary closing conditions, including receipt of
regulatory approvals and approval by HealthWise shareholders. The acquisition
is anticipated to close during United's 1996 second quarter and is expected
to be treated as a pooling of interests for accounting and financial
reporting purposes.
United and HealthWise issued a joint press release on February 1, 1996, a
copy of which is attached hereto as Exhibit 99.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit 99--United HealthCare Corporation and HealthWise of America,
Inc. press release, dated February 1, 1996.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED HEALTHCARE CORPORATION
(United)
By /s/ David P. Koppe
David P. Koppe
Chief Financial Officer
Date: February 15, 1996
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page
No.
99 United HealthCare Corporation and
HealthWise of America,Inc.press
release dated February 1, 1996. 5
EXHIBIT 99
United HealthCare Corporation HealthWise of America
Contact: Bernard McDonagh Contact: Ken Melkus
Vice President, Investor Relations Chairman and Chief Executive Officer
(612) 936-7214 (615) 385-4666
Susan Busch Harold D. Simpson
Director, Communications Vice President and Chief Financial
(612)992-5132 Officer
(615) 385-4666
UNITED HEALTHCARE SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
HEALTHWISE OF AMERICA, INC.
MINNEAPOLIS, MN and NASHVILLE, TN (February 1, 1996) --
United HealthCare Corporation (NYSE: UNH) and HealthWise of America, Inc.
(NASDAQ: HOAM) said today they have signed a definitive agreement under
which United HealthCare will acquire HealthWise of America, Inc. HealthWise,
which is based in Nashville, Tennessee, owns and operates health maintenance
organizations in Maryland, Kentucky, Tennessee and Arkansas with current
enrollment of approximately 154,000 members. In addition, HealthWise has
recently received an HMO license in Virginia and is expanding its Maryland
operations into Washington, D.C.
Completion of the acquisition, which is subject to the customary closing
conditions, including receipt of regulatory approvals and approval by
HealthWise shareholders, is expected during the second quarter. Shareholders
representing approximately 20 percent of the outstanding shares have agreed
to vote in favor of the transaction.
(more)
Page 2 of 3
Terms of the agreement call for United HealthCare to issue approximately 4.6
million shares of common stock in exchange for all outstanding equity
ownership and stock options in HealthWise of America, with each share of
common stock of HealthWise of America being converted into 0.6475 of a share
of common stock of United HealthCare. United expects the transaction to be
non-dilutive to earnings.
United HealthCare will file a registration statement with the Securities and
Exchange Commission and will apply to The New York Stock Exchange for listing
of the shares of its common stock to be issued in the transaction. The
transaction will be accounted for as a pooling-of-interests. A one-time non-
operating charge associated with the professional fees and other direct
merger costs is expected to be reported in the quarter ending June 30,
1996.
William W. McGuire, M.D., CEO of United HealthCare, said that the two
companies saw significant benefits emerging from the combination. These
included strengthening of capabilities in high growth markets and expansion
of products available to consumers. In particular, the acquisition allows
for:
UHC to gain access to established and strong operational managed care
infrastructures in markets that are still relatively under-penetrated and
where UHC has a significant presence through its MetraHealth clients.
These include Maryland, the District of Columbia, Virginia and Kentucky.
UHC currently serves over 400,000 people in these markets.
The combination of overlap health plans in the largely unpenetrated and
high growth markets of Tennessee and Arkansas where UHC has experienced
strong growth. In these areas, UHC s health plans and other products
serve nearly 280,000 people.
The opportunity to rapidly expand services to Medicare beneficiaries
through the existing Medicare risk program of HealthWise in Maryland, a
state with nearly 580,000 eligibles with less than 2% currently enrolled
in HMOs.
Page 3 of 3
McGuire added that the combination fit well into United s strategy of having
strong local management and operating infrastructure in place to serve people
with multiple product needs particularly in areas of high future growth
potential.
HealthWise of America Chief Executive Officer, Ken Melkus said, Through the
combination of our efforts with United HealthCare we are gaining access to
the products, technology and financial strength of the premier health care
services firm in the United States. United HealthCare is committed, as are
we, to providing high quality, cost effective health care services. By
combining our efforts with those of United, we will be able to preserve these
values as we undergo significant growth in our markets. We believe this
transaction to be attractive to our shareholders, employees, clients and the
many health care providers who have joined with us in offering quality health
care at reasonable costs.
United HealthCare now serves over 40 million individuals through its various
products, including managed care and indemnity programs, as well as managed
mental health and substance abuse services; utilization management; workers
compensation and disability management services; specialized provider
networks; third-party administration (TPA) services; employee assistance
services; Medicare and managed care programs for the aged; managed Medicaid
services; managed pharmacy; health care evaluation services; information
systems; and administrative services.
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