FINANCE

CVS to acquire Universal American’s Medicare business for $1.25 billion

BY CSA STAFF

Woonsocket, R.I. — CVS Caremark Corp. said Friday it will pay $1.25 billion to buy Universal American Corp.’s Medicare prescription drug services unit. The deal will more than double the size of the chain’s Medicare drug business.

CVS said it pursued the deal because with the country’s population aging, a growing percentage of Americans will get their prescription drug coverage from Medicare.

Universal American serves about 1.9 million people in the Medicare Part D federally subsidized prescription benefit program for Medicare recipients, while CVS serves 1.2 million.

CVS said the deal is expected to close in second quarter 2011 and will add to its earnings per share within a year. The agreement is contingent on approval by Universal American shareholders.

Under the agreement, CVS will acquire all stock in Universal American and give Universal American’s shareholders 100% of a new public company that will own Universal American’s Medicare Advantage and traditional insurance businesses. The new company will have about $640 million in cash and no debt, Universal American said.

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News

Target offers new way to welcome baby

BY CSA STAFF

MINNEAPOLIS – Target has created a new way for parents to share news about their new baby. The company last week announced the launch of its Big Baby Billboard, an interactive online experience that includes an outdoor presence in New York City and Los Angeles. For a limited time, parents can visit the Target Baby Facebook page to create a playful digital birth announcement that can be shared online with family and friends, the company reported. Target said it will then randomly select birth announcements for display in New York City’s Times Square (through Jan. 6) and on a larger-than-life magnetic board in Los Angeles (through Jan. 5).

"Technology plays an important role in how Target’s guests share and receive information and our Target Baby Facebook page serves as an excellent resource for new and expectant parents," said Will Setliff, VP marketing for Target. "We’re excited to tap into our guests’ online behaviors to provide them with a fun, relevant way to celebrate the birth of their child — whether that’s with friends and family, on an oversized magnetic billboard in Los Angeles or in the heart of our nation’s biggest city."

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FINANCE

J. Crew seeks $1.85 billion financing to fund leveraged buyout

BY CSA STAFF

New York City — J. Crew is seeking $1.85 billion of debt to help fund its $3 billion buyout by TPG Capital and Leonard Green & Partners LP.

Bank of America Corp. and Goldman Sachs Group are arranging a $1 billion seven-year term loan, $600 million in senior unsecured notes and a $250 million five-year asset-based revolving line of credit, according to a commitment letter attached to a regulatory filing, Bloomberg reported.

TPG and Leonard Green will finance their acquisition with a combined equity investment of up to $1.2 billion, according to a separate regulatory filing. Fort Worth, Texas-based TPG will invest up to $853 million of equity, while Los Angeles-based Leonard Green will contribute up to $317 million, the filing said.

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