Benzinga | Oct 7, 2021 04:57PM EDT

Molina Healthcare to Acquire Certain Assets Of AgeWell New York; Transaction Valued At ~$110M

Molina Healthcare, Inc. (NYSE:MOH) ("Molina") today announced that it has entered into an agreement to acquire the Medicaid Managed Long Term Care business of AgeWell New York. The purchase price for the transaction is approximately $110 million, net of certain tax benefits and Molina's target allocation of required regulatory capital.

AgeWell is a specialty managed care organization that provides long-term care services at home or in the community for those who are chronically ill or disabled in The Bronx, New York (Manhattan), Queens, Kings (Brooklyn), Nassau, Westchester, and Suffolk counties. As of August 31, 2021, AgeWell served approximately 13,000 managed long-term services and supports ("MLTSS") members, with full-year 2020 premium revenue of approximately $700 million.

"The addition of AgeWell to Molina's expanding New York footprint is not only complementary to our existing MLTSS business, but also representative of our strategic growth strategy," said Joe Zubretsky, president and chief executive officer of Molina Healthcare. "Our highest priority is to serve all Molina members with quality care and compassion, and we anticipate a seamless integration."

The transaction is synergistic with Molina's existing Senior Whole Health of New York MLTSS business, and presents an opportunity to leverage Molina's fixed cost base. The transaction is expected to be immediately accretive to Molina's adjusted earnings per share. Molina intends to fund the purchase with cash on hand. The transaction is subject to applicable federal and state regulatory approvals and the satisfaction of other customary closing conditions. It is expected to close by the third quarter of 2022.