State Approves PacificSource Transaction
The $46 million sale of Clear One Health Plans should be wrapped up in the second quarter.
All that remains is approval by Clear One shareholders and the Oregon Division of Medical Assistance Programs. The transaction is expected to close during the second quarter.
The $46 million purchase price by PacificSource will definitely boost the bank accounts of Clear One shareholders who’ll receive $26 per share. Among the largest shareholders are a conglomeration of central Oregon hospitals, more than 100 physicians and investment banks.
In seperate documents from our story earlier, we discovered another shareholder, D.A. Davidson & Co., an investment banking firm with 411,408 shares, according to the annual report submitted by Clear One to the Insurance Division.
PacificSource intends to borrow $20 million, using a line of credit, for the acquisition, and expects to repay that loan within four months after the closing. The remaining funds represent cash and securities held by PacificSource that are not designated for other business operations.
As Oregon’s fourth largest insurer, PacificSource covers 183,500 people in Oregon, Washington and Idaho.
For a closer look:
- Clear One had assets of $75.1 million and capital and surplus of $39.3 million on Dec. 31, 2009 – including a net loss of $7.5 million. At the same time, PacificSource reported assets of $177 million and had $110.5 million in surplus, including net income of $4.3 million.
- Once the acquisition is completed, PacificSource anticipates a 3.5 percent increase in administrative expenses.
- Clear One wrote premiums totaling $153 million in 2008, which accounted for 1.7 percent of the total accident and health premiums in Oregon, while, at the same time, PacificSource premiums reached $477.3 million or 5.26 percent of the total.
- In 2009, Clear One had premiums of $148 million, while PacificSource had $475 million.
For a list of the directors and officers who hold more than 10 percent of the shares, click here.
For related article click here.
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