By: G.F. Gay Le Breton and Alexander Aguilar February 13, 2023
Louisiana’s big M&A news in January was that Blue Cross and Blue Shield of Louisiana (BCBSLA) entered into an agreement to sell to Indianapolis-based Elevance Health Inc. (Elevance).
As a nonprofit, private mutual company, BCBSLA is owned by its policyholders. This means when the company sells, there are no owners in the traditional sense. The majority of the purchase price, expected to be in the billions, will be placed in a foundation called the Accelerate Louisiana Initiative. The foundation will have “the mission to improve the health and lives of the people of Louisiana by addressing health inequities and strengthening local communities,” according to a joint announcement of the two companies.
BCBSLA is Louisiana’s biggest provider of health care insurance, serving more than 1.9 million members. The company has 3,000 employees who are slated to join Elevance. Details of the foundation will not be finalized until the transaction closes, which is expected to happen later this year. Financial details of the deal were not disclosed.
Elevance, formerly known as Anthem, will add BCBSLA to its family of Anthem Blue Cross plans across 14 other states. “They can remain local, but will have the ability to leverage scale and be able to bring even more services to their membership,” Elevance president and chief executive Gail Boudreaux said.
For-profit Elevance had operating revenue of $155.7 billion in 2022, representing 13.7 percent growth over 2021. The company had approximately 47.5 million members at YE2022.
Also in January, Bernhard Capital Partners (BCP) announced that its portfolio company Atlas Technical Consultants, Inc. (Atlas) entered into an agreement to be acquired by GI Partners, a private investment firm, in a transaction valued at $1.05 billion, including outstanding debt.
Based in Austin, Texas, Atlas is a leading provider of infrastructure and environmental solutions. Atlas shareholders will receive $12.25 per share in cash, or approximately $490 million, which is a premium of 124% over the company’s closing share price the day the announcement was made. Baton Rouge private equity firm BCP, who owns approximately 43% of the outstanding common stock, has entered into a voting agreement in support of the transaction. The transaction is expected to close in the second quarter of 2023.
BCP formed Atlas in 2017 by combining three infrastructure management companies, Moreland Altobelli Associates, PAVETEX Engineering, and Engineering Testing Services. While under Bernhard’s control, the company made 19 acquisitions and went public. In February of 2020, Atlas was listed on the NASDAQ exchange.
In another noteworthy January announcement, the Port of South Louisiana, the state’s largest port, agreed to buy the former Avondale Shipyards from Virginia-based operator T. Parker Host (Host) for $445 million. The 254-acre facility is now known as Avondale Global Gateway after Host spent four years and $210 million purchasing and improving the site for intermodal commerce and manufacturing. Host will continue to manage the facility.
Port of South Louisiana executive director Paul Matthews said, “The purchase of Avondale Global Gateway helps form a region-wide strategy to maximize use of the state’s waterways for industrial development.” The port and Avondale both hope to develop the site as the center for the nascent offshore wind and alternative energy sector, as well as international trade.
The deal is dependent on taxpayer borrowing. The State Bond Commission will have to approve the port’s financing of the deal. Application with the commission is expected to be made in the first quarter of 2023.
G.F. Gay Le Breton is managing director for Chaffe & Associates Inc., responsible for the merger and acquisition activities of the firm. Alexander Aguilar is a financial analyst with the firm. Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC. For more information, visit http://chaffe-associates.com.