HomeMost PopularInvestingCentene (CNC) Sells Circle Health Group to PureHealth, Enhances Portfolio

Centene (CNC) Sells Circle Health Group to PureHealth, Enhances Portfolio

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Centene Corporation (CNC) has recently announced the signing of a definitive agreement to divest Circle Health Group to PureHealth for an enterprise value of $1.2 billion. Regulatory approvals are required for the transaction, which is expected to close in the first quarter of 2024.

This divestiture signifies Centene’s commitment to executing its value creation plan and expanding its Managed Care business. The company has achieved 7% year-over-year membership growth as of June 30, 2023, demonstrating the success of its growth strategy.

To strengthen its Medicare business, Centene has formed partnerships, including an exclusive partnership with The American Legion through its subsidiary Wellcare. These initiatives are expected to contribute to the growth of Centene’s Medicare business.

Centene is actively optimizing its portfolio and identifying strategic alternatives for shedding non-core assets. By divesting businesses to support its growth prospects, Centene aims to alleviate its debt burden and reduce interest expenses.

Centene has a history of divestitures, including the sales of Apixio, Magellan Specialty Health, Centurion, prison healthcare business, and Health Smart this year.

Price Performance

Centene’s stock has gained 3.3% in the past three months, outperforming the industry’s rise of 2.1%.

Zacks Rank & Key Picks

Centene currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical sector include Molina Healthcare, Inc. (MOH), Alcon Inc. (ALC), and The Ensign Group, Inc. (ENSG), all of which have a Zacks Rank #2 (Buy).

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You can download the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Disclaimer: The opinions expressed in this article are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

Source: Nasdaq.com

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