LAS VEGAS -- Sierra Health Services Inc. agreed to acquire Kaiser Permanente Group's Southwest division, a managed-health services business in the Dallas-Fort Worth area, bolster the managed-care company's Texas presence.
Financial terms weren't disclosed for the transaction, which Kaiser said marks the first time the nonprofit organization has sold one of its operations.
bTC The companies said they expect the acquisition, which needs to be approved by the two boards and by regulatory agencies, to be completed by Oct. 31.
Kaiser's Southwest division includes 123,000 health plan members and 150 doctors.
Sierra said the division will complement Sierra's existing operations in Houston and will allow it to offer its customers a wider range of physicians.
Sierra, based in Las Vegas, is buying the business through its HMO Texas LC unit.
"In Kaiser Permanente, we found a unique opportunity to export our expertise in running medical groups and insurance operations to a state where we already have regulatory, business and provider relationships," said Anthony Marlon, Sierra chairman and chief executive.
Kaiser, based in Oakland, Calif., has 9.1 million members in 19 states, including Maryland, and in Washington, D.C. The company offers managed health-care plans, runs a net-work of hospitals and sponsors groups of physicians who provide health care to its customers.
About half of Kaiser's physicians and more than half of its managed-health customers are in California, the company said.
Sierra shares rose 50 cents yesterday to close at $37.125.
Monday, Sierra Health's new Baltimore-based subsidiary, Sierra Military Health Services Inc., begins providing health care for up to 600,000 military dependents and retirees in a 13-state region. Sierra Military, which has 300 employees downtown, won a five-year $1.2 billion military contract in September.
Pub Date: 5/30/98