Analyst: Wellpoint deal good for Hoosiers

INDIANAPOLIS (WISH) - Indianapolis-based Wellpoint is getting bigger.

A week ago Monday, news that Indianapolis-based Brightpoint is being bought by a California company foreshadowed possible job losses. But this time, the news is different. Wellpoint is buying a Virginia company that is itself a Fortune 500 company. And that means one of the city's biggest corporate citizens is growing.

With several hundred employees at Wellpoint’s Monument Circle corporate headquarters , several thousand at its claims processing center just south of downtown and more than 35,000 worldwide, Wellpoint means a lot to Indianapolis.

"This is good news," said 24-Hour News 8 Financial Analyst Peter Dunn.

Dunn said Wellpoint is being proactive. With an aging population and the health care law upheld by the U.S. Supreme court, Dunn said, Wellpoint is putting itself in a position to make money.

"They've really increased their income stream as a company with projections of having a dollar-per-share increase in revenue for the company," he said.

Wellpoint CEO Angela Braly sees a bright future.

"We expect our combined expertise and capability will significantly accelerate our future growth in multiple segments of this business," she said during a conference call with investors this morning.

Virginia based Amerigroup manages publicly funded Medicare and Medicaid health programs in 13 states with more than 2 million members. That will double the number of Medicaid customers currently served by Wellpoint.

Wellpoint is paying $4.9 billion for Amerigroup, about $700 million in cash.

Analysts believe the deal will help Wellpoint grow its profits.

And, said Dunn, that should help Hoosiers.

"The brain drain has been something Indy has been fighting for a decade now,” he said,” so the better-paying jobs they have here, the better news like this, the better it is for everyone involved."

The Amerigroup acquisition is just one of several Wellpoint has made recently. Less than a month ago, it finalized it's purchase of 1-800-contacts. And last year Wellpoint bought Caremore group of California. Dunn said the company is being proactive, positioning itself to profit no matter which way the health care business goes.

The Amerigroup buyout is expected to be finalized by early 2013.