PacificSource to Buy Piece of Advantage Dental for $3.5 Million
Deal strengthens Advantage, the second largest dental plan in the state with 117,000 members, in position for takeovers of its own
July 9, 2009 -- PacificSource Health Plans is preparing to make a $3.5 million purchase, according to documentation obtained by TheLundReport.org.
Once the Oregon Insurance Division gives its okay, the Springfield-based health plan will own the commercial business of Advantage Dental Plan, which has 40,000 individual and group members.
Both parties anticipate closing the transaction by July 20, with PacificSource assuming the existing Advantage policies on Aug. 1.
Ken Provencher, president and CEO of PacificSource and Mike Shirtcliff, DMD, president of Advantage, signed an asset purchase agreement on June 17.
Advantage intends to retain ownership of its Medicare supplement dental business and its Oregon Health Plan contract.
PacificSource has agreed to create a low-cost capitated dental services insurance plan using Advantage dentists as its exclusive providers. Advantage will provide claims administration for at least six months following the transaction, and its name will be used on marketing materials.
The $3.5 million purchase price will be split between Advantage Dental Plans, Inc., which will receive $2 million (57 percent) and Advantage Professional Management LLC, which will be given $1.5 million (43 percent).
PacificSource, a nonprofit corporation, had $93.2 million in capital and surplus at the end of 2008.
Once the deal is completed, Advantage intends to use some of the proceeds to purchase Hayden Family Dentistry PC, which runs a dental plan for Oregon Health Plan members, and is owned by Cedric Hayden, DMD.
With that purchase, Advantage will have a strategic advantage, becoming the only dental plan with members in every county in Oregon, bringing its enrollment to 117,749 (based on May 1st data). Capitol Dental had the highest enrollment – 129,768 -- during the same time period.
Jul 9 2009