SafeGuard Health Enterprises, Inc. and privately held Paramount Dental Plan, Inc., has jointly announced the signing of a definitive agreement under which SafeGuard would purchase Paramount. Although specific terms were not disclosed, the purchase price will be paid in a combination of cash, SafeGuard stock and a convertible note. The transaction, which is expected to close in the third quarter subject to regulatory approval, is expected to be accretive to earnings in 2002.
Founded in 1995 by Nicholas M. Kavouklis D.M.D., Paramount currently has over 200,000 members primarily in the Tampa, St. Petersburg, and Orlando areas. Revenues for 2001 were over $6 million.
James E. Buncher, SafeGuard's president and chief executive officer, said, "The combination of SafeGuard and Paramount will substantially expand our presence in Tampa, St. Petersburg and Orlando, which are major growth areas in Florida, giving us the ability to compete more effectively on a broader scale. In addition to being accretive to earnings in 2002, we view this acquisition as a major event for SafeGuard because it confirms our confidence in the revamped, fiscally sound foundation that SafeGuard now has in place. First, we looked inward and strengthened our company, giving us the fiscal and organizational integrity to focus on external growth. We are now actively seeking complementary acquisitions that, like Paramount, represent quality additions that further strengthen our presence in existing markets."
Nicholas M. Kavouklis D.M.D., Paramount's president and chief executive officer, said, "We are very excited about this merger. SafeGuard possesses a great deal of industry knowledge, experience and technology that will complement our strengths. I have had extensive meetings with SafeGuard's senior management and found that our business philosophies are congruent. I am looking forward to working with their management team to establish a significant presence in the Florida market."
