Guardian Announces Agreement to Acquire Leading Government Benefit Provider

Avēsis purchase would strengthen Guardian’s government programs business with three million members

NEW YORK--()--The Guardian Life Insurance Company of America® (Guardian), a leader in employee benefits and one of the largest dental insurers in the country, has entered into a definitive agreement to acquire Avēsis Incorporated (Avēsis, OTC:AVSS), a leading government contract vision, dental and hearing provider with 440 employees and based in Owings Mills, MD with an operational center in Phoenix, AZ.

Chris Swanker, currently Guardian’s vice president of group and worksite markets, will assume the role of chief executive officer of Avēsis upon completion of the acquisition. Alan Cohn, Avēsis’ current chief executive officer, will remain with Avēsis as a business development and strategy consultant.

Avēsis is one of the leading administrators for vision, dental and hearing benefits for government and commercial programs with three million members administered under Medicaid, CHIP, and Medicare Advantage programs; and 1.5 million members covered by their group vision programs. Avēsis has partnerships with managed care organizations holding government contracts in 21 states.

“Guardian’s acquisition of Avēsis underscores our commitment to delivering affordable, quality vision, dental and hearing care to Americans where and how they prefer to be served,” said Mr. Swanker. “Avēsis’ proprietary network of independent dentists and optometrists provide significant synergies with Guardian’s extensive benefits portfolio, as well as those of our subsidiaries Premier Access Insurance Company and Access Dental Services.”

The acquisition strengthens Guardian’s government programs business with an experienced management team possessing deep knowledge of the market, a scalable operating and technology platform, existing relationships with leading managed care organizations, and a broad product portfolio.

“We are excited to join Guardian, a leader in employee benefits with an enviable 155-year history of commitment to its clients and employees,” said Mr. Cohn. “Working together, Guardian and Avēsis will strengthen our position as a leading administrator of vision, hearing and dental programs for government and commercial employees throughout the country.”

The closing of the transaction is subject to regulatory approval and satisfaction of other closing conditions.

Important Information for Avēsis Stockholders

Under the terms of the purchase agreement, in connection with the closing of the transaction Avēsis stockholders will receive an amount in cash of $16.00 to $16.30 for each share of Avēsis common stock they hold. They may also receive additional amounts in cash of up to $0.80 for each share of Avēsis common stock they hold upon the release of escrow funds over the next eighteen months following closing of the transaction and may also receive an additional amount in cash up to $5.00 for each share of Avēsis common stock they hold if certain revenue thresholds are met following closing of the transaction. In a separate spin-off transaction, Avēsis stockholders will also receive the stock of AbsoluteCARE, Inc. on a pro rata basis as AbsoluteCARE will be spun off immediately prior to the acquisition of Avēsis. The spin-off and the acquisition are expected to close in the first quarter of 2016.

Avēsis will mail an Information Statement to stockholders within the next 10 days summarizing the terms and conditions contained in the purchase agreement and including other important information regarding the spin-off of AbsoluteCARE and the acquisition by Guardian. This press release does not constitute a solicitation of any vote or approval. Stockholders are urged to read the Information Statement and other documents when they become available because they will contain important information about the proposed transactions.

The purchase agreement includes a “go-shop” period, during which Avēsis will actively solicit alternative proposals for the next 30 days continuing through January 20, 2016. For an additional 15 days following that period, the Avēsis Board of Directors will be permitted to continue discussions and enter into or recommend a transaction with any person or group that submitted a qualifying proposal during the 30 day period. The termination fee would be $7.8 million.

The Board of Directors of Avēsis unanimously approved the purchase agreement. The holders of a majority of the Avēsis common stock outstanding are expected to approve the acquisition by written consent, promptly after execution of the purchase agreement.

About Guardian

The Guardian Life Insurance Company of America® (Guardian) is one of the nation’s largest mutual life insurers, with $6.8 billion in capital and $1.3 billion in operating income (before taxes and dividends to policyholders) in 2014. Founded in 1860, the company has paid dividends to policyholders every year since 1868. Its offerings range from life insurance, disability income insurance, annuities, and investments for individuals to workplace benefits, such as dental, vision, and 401(k) plans for businesses. The company has approximately 6,000 employees and a network of over 3,000 financial representatives in more than 70 agencies nationwide. For more information about Guardian, please visit www.guardianlife.com.

About Avēsis

Founded in 1978, Avēsis has been providing essential ancillary benefit solutions for over 35 years. The Company offers vision, dental and hearing benefit programs to reduce sponsor and participant costs by delivering services through provider networks, to address the needs of clients and their covered members. The Company has corporate offices in Phoenix, Arizona and Owings Mills, Maryland.

Forward-looking Statements

Any statements in this press release about prospective performance and plans for Avēsis, the expected timing of the completion of the proposed acquisition and spin-off and the ability to complete the proposed acquisition, and other statements containing the words “estimates,” “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Factors or risks that could cause our actual results to differ materially from the results we anticipate include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the purchase agreement; (2) the inability to complete the proposed acquisition due to the failure to satisfy regulatory or other conditions to completion of the proposed acquisition; (3) risks related to disruption of management’s attention from the Avēsis ongoing business operations due to the transaction; and (4) the effect of the announcement of the proposed acquisition on Avēsis’ relationships with its customers, operating results and business generally.

Actual results may differ materially from those indicated by such forward-looking statements. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

Contacts

For Media Inquiries, Contact:
The Guardian Life Insurance Company of America
Ana Sandoval, 212-919-8551
Ana_Sandoval@glic.com
or
Harden Communications Partners
Erin Burke, 631-239-6903
eburke@hardenpartners.com

Release Summary

Guardian has entered into a definitive agreement to acquire Avēsis, a leading government contract vision, dental and hearing provider

Contacts

For Media Inquiries, Contact:
The Guardian Life Insurance Company of America
Ana Sandoval, 212-919-8551
Ana_Sandoval@glic.com
or
Harden Communications Partners
Erin Burke, 631-239-6903
eburke@hardenpartners.com