Ted Detrick, Investor Relations (215) , Mariann Caprino, Media Relations (860) ,

Transcription

1 NEWS RELEASE Cntacts: Ted Detrick, Investr Relatins (215) , Mariann Caprin, Media Relatins (860) , Karey L. Witty, EVP & CFO (615) , CIGNA TO ACQUIRE HEALTHSPRING Cigna Adds Industry Leading Medicare Slutin t Its Glbal Prtfli Cmbinatin Highly Aligned with Expanded Cnsumer Strategy in a High Grwth Segment Leverages Shared Cmmitment t Innvatin and Clinical Excellence Custmers Cntinue t Benefit frm Best-in-Class Physician Engagement and Access a Brader Prtfli f Services Accretive t Earnings and Imprves Lng Term Grwth Prfile fr Cigna Sharehlders BLOOMFIELD, CT and NASHVILLE, TN, Octber 24, 2011 Cigna Crpratin (NYSE: CI) and HealthSpring, Inc. (NYSE:HS) tday annunced that they have signed a definitive agreement under which Cigna will acquire all the utstanding shares f HealthSpring fr $55 per share in cash, a 37% premium ver the clsing stck price n Friday Octber 21, 2011, representing a ttal transactin value f apprximately $3.8 billin. HealthSpring s prven leadership team, headed by its Chairman and Chief Executive Officer Herb Fritch, will lead Cigna's expansin in ur rapidly grwing Senirs and Medicare segments. The business cmbinatin is expected t be accretive t Cigna earnings per share in the first full year f peratins. The agreement has been apprved by the bards f directrs f bth cmpanies and is subject t required regulatry apprvals and custmary clsing cnditins. The transactin is expected t clse during the first half f 2012 and is nt subject t a financing cnditin. HealthSpring is a great fit with Cigna's grwth plans t expand int the Senirs and Medicare segment thrugh a premier business and trusted brand name, said David M. Crdani, President and Chief Executive Officer. Our tw cmpanies share a cmmn strategic visin and philsphy that we create custmer value by partnering with health care prfessinals, and use infrmatin and incentives t deliver high-quality, differentiated prgrams. We are thrilled t annunce this transactin with Cigna, said Herb Fritch. Fllwing a review undertaken by ur Bard f Directrs f the cmpany s strategic ptins, we cncluded that the cmbinatin is in the best interests f ur sharehlders. The cmbinatin will als expand ur ability t serve ur physician partners and custmers. Cigna

2 2 recgnizes the value in HealthSpring s differentiated mdel f physician engagement, and shares ur cmmitment t prviding high quality, cst effective care t the members and cmmunities we serve. We truly lk frward t cntinuing and expanding upn this missin. The cmbinatin prvides Cigna with several significant pprtunities t further expand upn its successful grwth strategy: Scaled presence in the highly-attractive Senirs segment, with a highly differentiated Medicare Advantage business that currently has apprximately 340,000 Medicare Advantage members in 11 states and Washingtn, D.C., as well as a large, natinal stand-alne Medicare prescriptin drug business with ver 800,000 custmers; One f the mst trusted and well-respected brands ffering Senirs quality care thrugh its highly differentiated physician partnerships; Future grwth pprtunities t expand HealthSpring s custmer base by leveraging Cigna's current client relatinships and t further the expansin f HealthSpring int new gegraphic regins, leveraging Cigna s natinwide presence, custmer base and distributin capabilities; Ability t ffer Cigna s current cmmercial and individual custmers the pprtunity t experience HealthSpring s differentiated physician crdinatin mdel; and Further leverage Cigna's diverse prtfli f specialty prgrams fr the benefit f HealthSpring s custmers. HealthSpring s talented team, led by Herb and his senir leadership team, have built an innvative business, and a strng reputatin fr service excellence, while effectively partnering with health care prfessinals t deliver differentiated value and quality t the individuals they serve, cntinued David M. Crdani. By cmbining ur businesses, we have an pprtunity t create substantial value fr ur custmers, sharehlders, emplyees and ther key stakehlders as we extend ur health slutins and prgrams acrss the gvernment, emplyer-spnsred and cnsumer segments. Cnsistent with its strategy, Cigna expects t cntinue t create meaningful near-term earnings grwth and expects this transactin t enhance its revenue grwth and prfitability ver time. Cigna has btained a cmmitment fr bridge financing prvided by Mrgan Stanley that, cmbined with available liquidity, is sufficient t fund the acquisitin. Cigna intends t raise apprximately 20% f the purchase price thrugh the issuance f new equity, with the balance funded frm additinal debt issuance and internal cash resurces. This permanent financing structure is expected t enable Cigna t maintain its financial flexibility, a strng balance sheet and its current credit ratings. Cigna nted that it is filing this mrning a Frm 8-K that will utline its increased utlk fr its 2011 full year results, as well as detailing certain third quarter infrmatin ahead f its full earnings annuncement scheduled fr Octber 28, Cigna s financial adviser is Mrgan Stanley and its legal adviser is Davis Plk. Gldman, Sachs & C. is acting as financial adviser t HealthSpring, and its legal advisers are Skadden, Arps, Slate, Meagher & Flm, LLP and Bass, Berry & Sims PLC.

3 Cnference Call Cigna will be hsting a cnference call this mrning, beginning at 8:45 a.m. ET t discuss the acquisitin f HealthSpring. The call-in numbers fr the cnference call are as fllws: Live Call (877) (Dmestic) (719) (Internatinal) Passcde: Replay (888) (Dmestic) (719) (Internatinal) Passcde: It is strngly suggested yu dial in t the cnference call by 8:30 a.m. ET. The peratr will peridically prvide instructins regarding the call. Additinally, the cnference call will be available n a live Internet web cast at under Investrs, Investr Events sectin r at Please nte that this feature will be in listen-nly mde. Abut Cigna Cigna is a glbal health service cmpany dedicated t helping peple imprve their health, well-being and sense f security. Cigna Crpratin's perating subsidiaries in the United States prvide an integrated suite f health services, such as medical, dental, behaviral health, pharmacy and visin care benefits, as well as grup life, accident and disability insurance. Cigna maintains sales capability in 30 cuntries and jurisdictins and has apprximately 66 millin custmer relatinships thrughut the wrld. All prducts and services are prvided exclusively by such perating subsidiaries and nt by Cigna Crpratin. Such perating subsidiaries include Cigna Health and Life Insurance Cmpany, Cigna Life Insurance Cmpany f New Yrk, Cnnecticut General Life Insurance Cmpany and Life Insurance Cmpany f Nrth America. Abut HealthSpring HealthSpring is based in Nashville, Tennessee, and is ne f the cuntry s largest Medicare Advantage crdinated care plans. HealthSpring currently wns and perates Medicare Advantage plans in Alabama, Delaware, Flrida, Gergia, Illinis, Maryland, Mississippi, New Jersey, Pennsylvania, Tennessee, Texas and Washingtn, D.C. Beginning in 2012, the Cmpany will als perate Medicare Advantage plans in West Virginia. HealthSpring als ffers a natinal stand-alne Medicare prescriptin drug plan. Fr mre infrmatin, visit CIGNA'S CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Cigna Crpratin and its subsidiaries (the Cmpany ) and its representatives may frm time t time make written and ral frward-lking statements, including statements cntained in press releases, in the Cmpany s filings with the Securities and Exchange Cmmissin, in its reprts t sharehlders and in meetings with analysts and investrs. Frward-lking statements may cntain infrmatin abut financial prspects, ecnmic cnditins, trends and ther uncertainties. These frward-lking statements are based n management s beliefs and assumptins and n infrmatin available t management at the time the statements are r were made. Frward-lking statements include but are nt limited t the infrmatin cncerning pssible r assumed future business strategies, financing plans, cmpetitive psitin, ptential grwth pprtunities, ptential perating perfrmance imprvements, trends and, in particular, the Cmpany s strategic initiatives, litigatin and ther legal matters, peratinal imprvement initiatives in its Health Care peratins, and the utlk fr the Cmpany s full year 2011 and beynd

4 results. Frward-lking statements include all statements that are nt histrical facts and can be identified by the use f frward-lking terminlgy such as the wrds believe, expect, plan, intend, anticipate, estimate, predict, ptential, may, shuld r similar expressins. 4 By their nature, frward-lking statements: (i) speak nly as f the date they are made, (ii) are nt guarantees f future perfrmance r results and (iii) are subject t risks, uncertainties and assumptins that are difficult t predict r quantify. Therefre, actual results culd differ materially and adversely frm thse frward-lking statements as a result f a variety f factrs. Sme factrs that culd cause actual results t differ materially frm the frward-lking statements include: 1. the ability f the parties t satisfy cnditins t the clsing f the transactin with HealthSpring, including btaining required regulatry apprvals and the apprval f HealthSpring stckhlders; 2. the pssibility that HealthSpring may be adversely affected by ecnmic, business and/r cmpetitive factrs befre r after clsing f the transactin; 3. the ability t successfully cmplete the integratin f acquired businesses, including the businesses being acquired frm HealthSpring by, amng ther things, perating Medicare Advantage crdinated care plans and HealthSpring s prescriptin drug plan, retaining and grwing membership, realizing revenue, expense and ther synergies, renewing cntracts n cmpetitive terms, successfully leveraging the infrmatin technlgy platfrm f the acquired businesses, and retaining key persnnel; 4. the ability f the Cmpany t execute its grwth plans by successfully leveraging its capabilities and thse f the businesses being acquired in serving the Senirs segment; 5. any adverse effect t the Cmpany s business r the business being acquired frm HealthSpring due t uncertainty relating t the transactin; and 6. the Cmpany s plans t permanently finance the acquisitin with internal cash resurces and thrugh issuance f new equity; and additinal debt that wuld remain utstanding even if the transactin was ultimately nt cmpleted. This list f imprtant factrs is nt intended t be exhaustive. Other sectins f the Cmpany s mst recent Annual Reprt n Frm 10-K, including the Risk Factrs sectin, the Quarterly Reprts n Frm 10-Q fr the quarters ended March 31, 2011 and June 30, 2011, and ther dcuments filed with the Securities and Exchange Cmmissin include bth expanded discussin f these factrs and additinal risk factrs and uncertainties that culd preclude the Cmpany frm realizing the frwardlking statements. The Cmpany des nt assume any bligatin t update any frward-lking statements, whether as a result f new infrmatin, future events r therwise, except as required by law. Additinal Infrmatin and Where t Find It This cmmunicatin is being made in respect f the prpsed transactin invlving HealthSpring and Cigna. The prpsed transactin will be submitted t the stckhlders f HealthSpring fr their cnsideratin. In cnnectin with the prpsed transactin, HealthSpring will prepare a prxy statement t be filed with the Securities and Exchange Cmmissin (the SEC ). HealthSpring and Cigna plan t file with the SEC ther dcuments regarding the prpsed transactin. STOCKHOLDERS OF HEALTHSPRING ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final prxy statement will be mailed t HealthSpring s stckhlders. Yu may btain cpies f all dcuments filed with the SEC cncerning the prpsed transactin, free f charge, at the SEC s website at In additin, stckhlders may btain free cpies f the dcuments filed with the SEC by HealthSpring by ging t the Cmpany s Investr Relatins website page at r by sending a written request t the Cmpany s Secretary at HealthSpring, Inc., 9009 Carthers Parkway, Suite 501, Franklin, Tennessee 37067, r by calling the Secretary at (615) Interests f Participants HealthSpring and its directrs and executive fficers may be deemed t be participants in the slicitatin f prxies frm the stckhlders f the Cmpany in cnnectin with the prpsed transactin. Infrmatin regarding the Cmpany s directrs and executive fficers is set frth in the Cmpany s prxy statement fr its 2011 annual meeting f stckhlders and its Annual Reprt n Frm 10-K fr the fiscal year ended December 31, 2010, as amended by Amendment N. 1 n Frm 10-K/A, which were filed with the SEC n April 15, 2011, February 25, 2011 and September 22, 2011, respectively. Additinal infrmatin

5 5 regarding persns wh may be deemed t be participants in the slicitatin f prxies in respect f the prpsed transactin will be cntained in the prxy statement t be filed by the Cmpany with the SEC when it becmes available. HealthSpring s Cautinary Statement Regarding Frward-Lking Statements Statements cntained in this cmmunicatin that are nt histrical fact are frward-lking statements which HealthSpring intends t be cvered by the safe harbr prvisins fr frward-lking statements cntained in the Private Securities Litigatin Refrm Act f Statements that are predictive in nature, that depend n r relate t future events r cnditins, r that include wrds such as anticipates, believes, culd, estimates, expects, intends, may, plans, ptential, predicts, prjects, shuld, will, wuld, and similar expressins are frward-lking statements. The frward-lking statements invlve significant knwn and unknwn risks, uncertainties and ther factrs that culd cause actual results t differ materially frm thse expressed in r implied by the frward-lking statements, and undue reliance shuld nt be placed n such statements. Imprtant factrs that culd cause actual results t differ materially frm thse in the frward-lking statements include, amng ther things, the fllwing risks and uncertainties: the failure t receive, n a timely basis r therwise, the required apprvals by HealthSpring s stckhlders and gvernment r regulatry agencies; the risk that a cnditin t clsing f the prpsed transactin may nt be satisfied; HealthSpring s and Cigna s ability t cnsummate the Merger, including the financing theref; the pssibility that the anticipated benefits and synergies frm the prpsed transactin cannt be fully realized r may take lnger t realize than expected; the failure t btain the necessary debt financing arrangements set frth in the cmmitment letter received in cnnectin with the Merger; the pssibility that csts r difficulties related t the integratin f the Cmpany and Cigna peratins will be greater than expected; perating csts and business disruptin, including difficulties in maintaining relatinships, may be greater than expected; the ability f the Cmpany r the cmbined cmpany t retain and hire key persnnel and maintain relatinships with prviders r ther business partners; the impact f legislative, regulatry and cmpetitive changes and ther risk factrs relating t the industry in which the Cmpany and Cigna perate, as detailed frm time t time in each f the Cmpany s and Cigna s reprts filed with the SEC. There can be n assurance that the prpsed transactin will in fact be cnsummated. Additinal infrmatin abut these factrs and abut the material factrs r assumptins underlying such frward-lking statements may be fund under Item 1.A in f HealthSpring s Annual Reprt n Frm 10-K fr the fiscal year ended December 31, 2010, and Item 1.A f HealthSpring s mst recent Quarterly Reprt n Frm 10-Q fr the quarter ended June 30, HealthSpring cautins that the freging list f imprtant factrs that may affect future results is nt exhaustive. When relying n frward-lking statements t make decisins with respect t the prpsed transactin, stckhlders and thers shuld carefully cnsider the freging factrs and ther uncertainties and ptential events. All subsequent written and ral frwardlking statements cncerning the prpsed transactin r ther matters attributable t HealthSpring r any ther persn acting n its behalf are expressly qualified in their entirety by the cautinary statements referenced abve. The frward-lking statements cntained herein speak nly as f the date f this cmmunicatin. HealthSpring des nt undertake any bligatin t update r revise any frward-lking statements fr any reasn, even if new infrmatin becmes available r ther events ccur in the future, except as may be required by law.