HARTFORD, CT, Jan. 8, 2001 -- In a joint statement made today, Connecticut Attorney General Richard Blumenthal, The Connecticut Health Foundation, Inc. and ConnectiCare, Inc. announced an agreement with two private equity investment firms who will make a significant investment in ConnectiCare. As a result of this agreement, the Connecticut Health Foundation will receive over $130 million for its ownership interest in ConnectiCare to be used to benefit the health and well being of residents statewide. ConnectiCare will receive an additional $20 million to be used to grow and expand within the region and to add new products and services.

"This investment transaction will assure that the Foundation will be able to convert its interest in ConnectiCare into millions of dollars for the community, and is truly a win-win-win for the Foundation, ConnectiCare and Connecticut's citizens," said Foundation Chairman Leo Canty, echoing comments made by Connecticut Attorney General Richard Blumenthal when the Foundation was launched 18 months ago.

Under the terms of the original plan, ConnectiCare reorganized into a for-profit holding company and subsidiaries, including a Connecticut-licensed HMO, and a charitable foundation - the Connecticut Health Foundation - was created. The Foundation's purpose is to use the funds eventually realized through the sale of its shares of ConnectiCare stock to improve the health status of the people of Connecticut.

"We are eager to begin fulfilling our mandate to help build a healthier Connecticut," said Canty, "and now, thanks to funding received as a result of ConnectiCare's significant growth and profitability, we will be able to proceed with vigor." Funds received by the Foundation will be used principally for areas found to be both of high need and underfunded, with priority given to initiatives designed to reduce ethnic and racial health disparities as well as to support oral health and children's mental health needs.

"Creating this foundation is a historic step in addressing the dire, dangerous shortage in community health resources. We insisted on preserving and enhancing ConnectiCare's mission as a non-profit of serving community health care goals-providing immensely promising opportunities for meeting the health needs of children and others now at risk," said Attorney General Richard Blumenthal, who oversaw and approved the capital-raise process. "This transaction successfully culminates the vigorous, thorough process we established 18 months ago and provides the Foundation with a solid financial base for launching its community benefit health programs."

Consistent with the original plan, the transaction will enable ConnectiCare to move forward with its plan to grow and expand within the region and to add new products and services.

"It is," said ConnectiCare Board Chairman, Eileen Kraus, "truly a beneficial agreement for all. Individuals and families in the state who are reached through the Foundation stand only to gain. Our members, customers and caregivers have selected us - and remain loyal to us - because of the quality of our service, our affordability, and our local focus. Now, thanks to the agreement that has been reached, we will have the necessary capital to improve and expand both our products and our service. We are proud of our record as a locally focused health plan that 'cares about its members,' and are ready to further develop our 'best in class' position."

"We are most fortunate," Kraus concluded, "to have found investment partners who recognize our strong growth potential based on the Company's recent financial improvement and hold confidence in the existing management team. No management changes or employee layoffs are expected as an immediate result of the transaction, which is subject to approval by the Connecticut Department of Insurance and other customary closing conditions.

News Release
Contact: 
Patricia Baker
CT Health Foundation
(860) 409-7774
pat@cthealth.org

Deb Hoyt
ConnectiCare, Inc.
(860) 674-7003