Aetna 2012 Annual Report Download - page 10

Annual Report- Page 4
During 2011, we completed the acquisitions of Medicity Inc. (“Medicity”), Prodigy Health Group (“Prodigy”),
Genworth Financial, Inc.'s (“Genworth's”) Medicare Supplement business and related blocks of in-force business
and PayFlex Holdings, Inc. (“PayFlex”).
• Medicity Inc.
In January 2011, we acquired Medicity, a health information exchange company, for approximately $490
million, net of cash acquired. We recorded goodwill related to this transaction of approximately $385
million, an immaterial amount of which will be tax deductible. This acquisition enabled us to offer a set of
convenient, easy-to-access technology solutions for physicians, hospitals and other health care providers.
Medicity is a key component of our Accountable Care Solutions (“ACS”) offerings. Our ACS solutions are
focused on growing membership in our medical products through provider collaborations that are designed
to lower costs.
• Prodigy Health Group
In June 2011, we acquired Prodigy, a third-party administrator of self-funded health care plans, for
approximately $600 million, net of cash acquired. We recorded goodwill related to this transaction of
approximately $445 million, of which approximately $52 million will be tax deductible. Prodigy extended
our capabilities in the third-party administrator business and provided a separate option under the Prodigy
brands that addresses affordability and quality for middle-sized and small businesses and customers who
are primarily price-focused. In addition to enhancing our medical product offerings, Prodigy complements
our ACS initiatives.
• Genworth Financial, Inc.’s Medicare Supplement Business and Related Blocks of In-Force Business
In October 2011, we acquired Genworth's Medicare Supplement business and related blocks of in-force
business for approximately $276 million. We recorded $53 million of goodwill related to this transaction.
The excess of the purchase price over the fair market value of the net assets we acquired, including
goodwill, is tax deductible as a result of the transaction being treated as an asset purchase for tax purposes.
This acquisition brought members and enhanced our capabilities to grow our Medicare Supplement
business, which include access to commercial retirees and Medicare Prescription Drug Plan members,
multi-channel distribution and our other product offerings.
• PayFlex Holdings, Inc.
In October 2011, we acquired PayFlex, one of the nation’s largest independent account-based health plan
administrators, for approximately $200 million, net of cash acquired. We recorded goodwill related to this
transaction of approximately $149 million, an immaterial amount of which will be tax deductible.
Acquiring PayFlex extended our ability to provide members with flexible, customized, easy-to-use tools
and solutions to better manage their health care expenses, and those capabilities enhance our medical
product offerings.
Refer to Notes 3 and 7 of Notes to Consolidated Financial Statements beginning on pages 90 and 93, respectively
for additional information.
In 2012, 2011 and 2010, we repurchased approximately 32 million, 45 million and 52 million shares of our common
stock at a cost of approximately $1.4 billion, $1.8 billion and $1.6 billion, respectively, under share repurchase
programs authorized by Aetna's Board of Directors (our “Board”).