SafeGuard Health Enterprises, Inc. and privately held Paramount Dental Plan, Inc. have jointly announced the completion of the previously announced acquisition and merger of Paramount with SafeGuard's Florida Dental HMO. Although specific terms were not disclosed, the purchase price was paid in a combination of cash, SafeGuard stock and a convertible note. The transaction is expected to be immediately accretive to earnings.
Founded in 1995 by Nicholas M. Kavouklis DMD, Paramount currently has over 225,000 members primarily in the Tampa, St. Petersburg, and Orlando areas. Dr. Kavouklis will join SafeGuard as president of SafeGuard's Florida operations, which will encompass over 275,000 dental HMO, PPO/Indemnity and Vision members.
SafeGuard also announced the completion of the sale of its Utah Dental HMO. SafeGuard does not expect to report a significant gain or loss on this sale.
James E. Buncher, SafeGuard's president and chief executive officer, said, "We are pleased to have completed the acquisition and merger of Paramount with our Florida dental HMO. We expect the transaction will be immediately accretive to earnings. Our due diligence confirmed our belief that joining the two companies would create a strong SafeGuard presence in Florida. We are looking forward to working with the Paramount management to ensure a smooth integration of Paramount's members into the combined company. This transaction strengthens our position in Central and Southern Florida by increasing our Florida membership to over 275,000 members. Through our new headquarters in Tampa and our satellite office in Ft. Lauderdale, we anticipate significant growth as well as expansion into Northern Florida. We are also excited about Dr. Kavouklis joining our management team as president of SafeGuard - Florida."
Dr. Kavouklis, Paramount's president and chief executive officer, said, "We are very excited about this merger. SafeGuard has a substantial amount of industry knowledge, experience and technology that will complement the strengths of Paramount. I have had extensive discussions with SafeGuard's senior management and found that our business philosophies are congruent. I am looking forward to being part of the combined management team and continuing to build on our existing business in the Florida market."
Buncher added, "SafeGuard continues to strengthen the Company by focusing on our core business and divesting managed dental care operations not located within our three primary markets of California, Florida and Texas. We are fortunate to have identified a local buyer for our Utah Dental HMO. They have also agreed to serve new managed dental care members located in Utah that are part of groups we sell in our primary markets. SafeGuard will continue to market and administer dental PPO/indemnity and vision products in Utah. These transactions are yet another step in our steady progress toward focus and growth in our target markets."
SafeGuard provides dental benefit plans with HMO and PPO/indemnity plan designs, vision benefit plans, administrative services, and preferred provider organization services. With the completion of these transactions, the Company serves approximately 825,000 members, primarily in California, Florida and Texas.
