Centene mulls sale of Circle Health Group

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US health insurance and managed care company Centene is reviewing its “non-core assets”, including its international ventures as part of its value creation strategy. UK-based private hospital operator Circle Health Group is under consideration.

The divestment news comes as Centene looks to expand into new US markets.

Circle currently operates 50 hospitals and 1,900 beds across the UK and its revenue represents two-thirds of international business revenue, Centene said.

Circle Health Group declined our request to comment.

A UK source tells HealthInvestor UK that the announcement wouldn’t make any difference to Circle. “Centene only bought the business this year, there is no sale process taking place, and Centene has not said it plans to sell Circle Health Group.”

Integrated care provider Ribera Salud in Spain is Centene’s second international business and a divestment target as well. It operates 10 hospitals with 1,650 beds and 71 outpatient centers. Ribera caters to both government and private pay patients.

The two are worth more than $2 billion in annual revenue.

The company said in a press release: “The three major pillars of the Value Creation Plan include SG&A savings, gross margin improvement, and strategic capital allocation.

“In conjunction with the Value Creation Plan, Centene is reviewing its non-core assets as part of its ongoing portfolio optimization processes, including evaluating strategic alternatives for its international business. In terms of returning additional value to shareholders, share repurchases are expected to play a more meaningful role in 2022 and beyond.”

Centene aims to finalize its acquisition of Phoenix-based behavioral health provider Magellan Health by the end of 2021.

Astonishingly, the company forecasts up to $137.9 billion in revenue for 2022.

The announcements were made on Centene’s annual investor day.

Date published: December 21, 2021

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