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Irvine's Core Inc. Agrees to Acquisition

Merger: Price of $4.92 a share is 31% higher than the disability benefits manager's closing price.

March 30, 2001|E. SCOTT RECKARD | TIMES STAFF WRITER

Core Inc., an Irvine manager of disability and employee absence benefits, said Thursday that it has agreed to be acquired by a New York financial services group for about $45 million in cash.

Core said in a press release that Fortis Inc., which provides specialty insurance and investment products, will pay $4.92 a share for Core stock. The price is 31% higher than Core's closing price Thursday of $3.75 a share on Nasdaq.

Core's $13-million debt will be repaid when the deal closes, which is expected in about three months, the companies said.

Core, which lost $722,851 on revenue of $64 million in 1999, had announced at the end of February that it was negotiating for a possible sale. It said it was in technical violation of its credit arrangement with Fleet National Bank.

Job losses are not expected to be significant, the company said. Core is expected to maintain its current operations in California, Maine, Maryland, Massachusetts, Michigan and Minnesota.

Core, a spinoff of Baxter International Inc., manages disability benefits for 1.8 million employees at companies such as Apple Computer Inc. and DaimlerChrysler and the state of Virginia. Most of its revenue came from fees paid for employee absence-management services.

Only last July, the company saw a bright future with continued growth in the case management sector, where it acts as a liaison for injured and ill employees and tracks medical and therapeutic care for employers.

But Core also saw potential for new revenue by blending the Internet and proprietary software to help employers predict when employees will be unable to work and how long they would be out.

What Core has is a decade's worth of data gleaned from a variety of disability cases. The company knows what types of accidents and illnesses are likely to occur, what time of the workday they will happen and how long an employee might take to recover. The goal in gathering all the data is to get employees back to work, the company has said.

Core and its subsidiaries employ nearly 600 workers in offices nationwide and serve more than 350 clients, including numerous Fortune 500 clients.

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