As Demand for Virtual Health Care Surges, Evernorth Announces Acquisition of Long-Term Partner, MDLIVE

Rhea-AI Summary

Evernorth, Cigna's health services portfolio, announced a definitive agreement to acquire MDLIVE, a leading virtual care platform. This acquisition aims to enhance Evernorth's offerings, providing more affordable and connected patient care experiences. The deal is subject to customary closing conditions and expected to finalize in Q2 2021, pending regulatory approvals. Cigna anticipates that the acquisition will impact its adjusted earnings per share positively, with at least $20 projected for 2021.

Positive

• Expansion of Evernorth's virtual care capabilities through MDLIVE's platform.
• Expected enhanced affordability and accessibility for patients.
• Opportunity to serve millions more, optimizing the care journey.
• Strategic alignment with MDLIVE, a long-term partner.

Negative

• None.

BLOOMFIELD, Conn. and MIRAMAR, Fla., Feb. 26, 2021 /PRNewswire/ -- Evernorth, the leading health services portfolio of Cigna, today announced it has entered into a definitive agreement to acquire MDLIVE, a privately held, leading 24/7 virtual care delivery platform. Upon completion, this transaction will provide Evernorth with a highly complementary platform that will rapidly expand Evernorth's capabilities to deliver a more affordable, convenient and connected patient care experience.

"Customers expect more convenient care interactions, and COVID-19 has rapidly accelerated this need. We see an immediate opportunity to build a new model of care delivery, one that delivers a connected experience with greater affordability, predictability and simplicity. With the opportunity to serve millions more people, and with more personalized ways to deliver care, we will have an even greater impact on our customers, clients and partners," said Tim Wentworth, Chief Executive Officer of Evernorth. "Combining MDLIVE's platform and strong network for virtual providers with our comprehensive care solutions, we will be better positioned to optimize the care journey to improve affordability and accessibility, and to deliver superior support to health plans as they advance their own care delivery models for the future."

"Becoming part of the Evernorth portfolio is an opportunity for MDLIVE to join an organization that complements our work, and has been a long-time partner and investor in our business," said Charles Jones, Chairman and Chief Executive Officer of MDLIVE. "Together, we can accelerate MDLIVE's growth strategy and ability to serve more customers, while also building new services that will benefit our existing stakeholders, including employees, partners, patients, customers, health plans and providers. With this transaction, Evernorth will gain an industry-leading platform, and a passionate and pioneering workforce that made virtual care a reality, and an essential and life-saving service during the COVID-19 pandemic."

With high customer and provider satisfaction ratings, it is clear patients and providers value their experience with MDLIVE. MDLIVE also has a sizable and forward-thinking client base, a class-leading provider network, brand recognition among customers and consumers, and experience in medical and behavioral health. Together, we imagine a new end-to-end care experience to complement – not replace – the way customers and patients interact with their existing providers to achieve:

• earlier identification and diagnosis of critical care needs;
• faster and more seamless referrals to high-performing providers, including specialists and behavioral health; and
• more convenient access to appropriate, affordable sites of service, and pharmaceutical fulfillment.

"From cost to complexity to quality, there is tremendous potential for progress in health care. As one, Evernorth and MDLIVE can accelerate meaningful change," said Eric Palmer, President and Chief Operating Officer of Evernorth. "MDLIVE will be part of the new, differentiated and future-state care solutions that improve the patient experience, close the patient-provider accessibility gap, and bring providers opportunities to augment the services they currently offer. We'll also have the opportunity to expand the reach of MDLIVE's capabilities to Evernorth's clients, as well as Cigna's U.S. Medical customers and clients."

The transaction is subject to customary closing conditions, and is expected to close in the second quarter of 2021, subject to receipt of required regulatory approvals.

Cigna continues to expect to deliver 2021 adjusted earnings per share of at least $20 inclusive of the impact of the acquisition of MDLIVE.¹  Cigna plans to provide additional information pertaining to the proposed acquisition of MDLIVE during its upcoming Investor Day event scheduled for March 8, 2021.

Advisors
BofA Securities acted as exclusive financial advisor to MDLIVE, and Davis Polk & Wardwell served as legal counsel.

Greenhill & Co., LLC served as exclusive financial advisor to Cigna. Wachtell Lipton Rosen & Katz served as legal counsel, and Sheppard, Mullin, Richter & Hampton acted as regulatory counsel to Cigna.

About Evernorth
Evernorth is Cigna's high-performing health services portfolio. The Evernorth brand is anchored by Evernorth Health, Inc., a wholly-owned subsidiary of Cigna Corporation, and the parent company of the Express Scripts, Accredo and eviCore companies. Evernorth brings together and coordinates premier health services offerings to deliver innovative and flexible solutions for health plans, employers and government programs. All Evernorth solutions are serviced and provided by or through operating affiliates of Evernorth Health or third-party partners. To learn more about Evernorth, visit https://www.Evernorth.com/.

About MDLIVE
MDLIVE offers convenient, affordable and contagion-free virtual healthcare services to over 60 million members nationwide. Our network of board-certified physicians, dermatologists, psychiatrists and therapists are specially trained in virtual care and are committed to the highest quality treatment and the best possible patient experience. We leverage technology and artificial intelligence to simplify and streamline, connecting providers and patients whenever and wherever it's most convenient, often within just minutes. To learn more about our expanding product suite and our partnerships with major health plans, hospital systems and employers, visit www. MDLIVE.com, download our app, or text "Sophie" to MDLIVE (635483) to register.

Notes:

1. Adjusted earnings per share means adjusted income from operations on a fully diluted basis. At the consolidated level, adjusted income from operations is not determined in accordance with accounting principles generally accepted in the United States ("GAAP") and should not be viewed as a substitute for the most directly comparable GAAP measure, shareholders' net income. Adjusted income (loss) from operations is defined as shareholders' net income (loss) excluding the following adjustments: net realized investment results, amortization of acquired intangible assets, and special items and is measured on an after-tax basis for consolidated results.  Adjusted income (loss) from operations is a measure of profitability used by Cigna's management because it presents the underlying results of operations of Cigna's businesses and permits analysis of trends in underlying revenue, expenses and shareholders' net income.  Cigna's 2021 outlook includes approximately $1.25 per share in net unfavorable impacts of COVID-19, as well as the impact of future share repurchases and anticipated 2021 dividends and the anticipated impacts from the proposed acquisition of MDLIVE.  Cigna's management is not able to provide a reconciliation of adjusted income from operations to shareholders' net income (loss) on a forward-looking basis because it is unable to predict, without unreasonable effort, certain components thereof including (i) future net realized investment results (from equity method investments with respect to adjusted revenues) and (ii) future special items. These items are inherently uncertain and depend on various factors, many of which are beyond Cigna's control. As such, any associated estimate and its impact on shareholders' net income could vary materially.

CIGNA FORWARD LOOKING STATEMENTS
This press release, and oral statements made in connection with this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on Cigna's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements include statements relating to the impact of the proposed acquisition of MDLIVE, including, without limitation, the impact of the transaction on Cigna's projected adjusted earnings per share, the projected closing date for the transaction and the projected impact of the transaction on the parties. You may identify forward-looking statements by the use of words such as "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "may," "should," "will" or other words or expressions of similar meaning, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those expressed or implied in forward-looking statements.

Such risks and uncertainties include, but are not limited to: receipt of the regulatory approvals necessary for the transaction; the satisfaction or waiver of closing conditions for the transaction; effects on the business as a result of uncertainty surrounding the proposed transaction; as well as more specific risks and uncertainties discussed in Cigna's most recent report on Form 10-K, and subsequent reports available through the Investor Relations section of www.Cigna.com. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance or results, and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Cigna undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.

Contact:
Justine Sessions
(860) 810-6523
media@evernorth.com

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SOURCE Evernorth

FAQ

What is the purpose of Evernorth's acquisition of MDLIVE?

The acquisition aims to enhance virtual care capabilities, improve patient care affordability, and expand service access.

When is the expected closing date for the MDLIVE acquisition?

The acquisition is expected to close in the second quarter of 2021, pending regulatory approvals.

How will the MDLIVE acquisition impact Cigna's earnings?

Cigna expects the acquisition to positively impact its adjusted earnings per share, with a minimum projection of $20 for 2021.

Who is involved in the acquisition transaction?

Evernorth is acquiring MDLIVE, with financial advisorship from BofA Securities for MDLIVE and Greenhill & Co. for Cigna.

What benefits does Evernorth expect from acquiring MDLIVE?

Evernorth anticipates enhanced patient care delivery through MDLIVE's platform, including better access and referral processes.