Purchase of leading government benefit provider adds three million members
NEW YORK, N.Y., February 01, 2016 —The Guardian Life Insurance Company of America® (Guardian), a leader in employee benefits and one of the largest dental insurers in the country, has completed its previously announced acquisition of Avēsis Incorporated (Avēsis, OTC:AVSS), a leading government contract vision, dental and hearing provider.
Avēsis strengthens Guardian’s government programs business as one of the leading administrators for vision, dental and hearing benefits for government and commercial programs with three million members administered under Medicaid, CHIP, and Medicare Advantage programs; and 1.5 million members covered by their group vision programs. Avēsis has partnerships with managed care organizations holding government contracts in 21 states.
Chris Swanker, formerly Guardian’s vice president of group and worksite markets, has been appointed chief executive officer of Avēsis, which has 440 employees and is based in Owings Mills, MD with an operational center in Phoenix, AZ.
Important Information for Avēsis Stockholders
As previously announced, on December 21, 2015, Guardian entered into a definitive agreement to acquire Avēsis Incorporated in exchange for the payment to Avēsis stockholders of cash and certain contingent earn-out payments in exchange for their Avēsis stock. On January 29, 2016, Avēsis completed the spin-off of its AbsoluteCARE subsidiary (separately valued at approximately $4 million, or $0.35 per share) to the Avēsis stockholders. Then, later on January 29, 2016, Avēsis completed the merger and became a subsidiary of Guardian.
Pursuant to the terms of the definitive agreement, Avēsis stockholders will be entitled to an initial cash payment of $16.45 per share as soon as the stockholder surrenders his, her or its Avēsis stock certificates and provides the required letter of transmittal and any other necessary documents to the paying agent, Continental Stock Transfer & Trust Company.
Approximately $0.80 per share (an aggregate of approximately $9.2 million) initially will be deposited into escrow accounts to be available to indemnify the Buyer for any breaches of representations and obligations under the merger agreement, to be used to fund any required working capital adjustments, and to be used for expenses of the representative of the stockholders, Alan S. Cohn. Each outstanding share will also entitle the stockholder to receive his, her or its proportionate share of an “earn-out” payment that could be $0 but also could be up to $60 million (from $0 up to $5.00 per share after estimated expenses) depending upon the amount of certain revenues generated by Avēsis during 2016. Any payments to former Avēsis stockholders from the escrows and the earn-out will occur in increments over approximately the next two years as provided in the definitive agreement, with the earn-out payment (if any) made in 2017.
The Guardian Life Insurance Company of America® (Guardian) is one of the nation’s largest mutual life insurers, with $6.8 billion in capital and $1.3 billion in operating income (before taxes and dividends to policyholders) in 2014. Founded in 1860, the company has paid dividends to policyholders every year since 1868. Its offerings range from life insurance, disability income insurance, annuities, and investments for individuals to workplace benefits, such as dental, vision, and 401(k) plans for businesses. The company has approximately 6,000 employees and a network of over 3,000 financial representatives in more than 70 agencies nationwide. For more information about Guardian, please visit www.guardianlife.com.
Founded in 1978, Avēsis has been providing essential ancillary benefit solutions for over 35 years. The Company offers vision, dental and hearing benefit programs to reduce sponsor and participant costs by delivering services through provider networks, to address the needs of clients and their covered members. The Company has corporate offices in Phoenix, Arizona and Owings Mills, Maryland.
Any statements in this press release about prospective performance and plans for Avēsis, the expected timing of the completion of the proposed acquisition and spin-off and the ability to complete the proposed acquisition, and other statements containing the words “estimates,” “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors or risks that could cause our actual results to differ materially from the results we anticipate include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the purchase agreement; (2) the inability to complete the proposed acquisition due to the failure to satisfy regulatory or other conditions to completion of the proposed acquisition; (3) risks related to disruption of management’s attention from the Avēsis ongoing business operations due to the transaction; and (4) the effect of the announcement of the proposed acquisition on Avēsis’ relationships with its customers, operating results and business generally.
Actual results may differ materially from those indicated by such forward-looking statements. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.