Molina Healthcare, Inc. MOH inked a deal to acquire substantially all the assets of Affinity Health Plan (Affinity) for around $380 million, net of expected tax benefits and inclusive of an amount representing the company’s target allocation of the required regulatory capital. The company intends to fund it with cash in hand. Subject to certain closing conditions, it expects the deal to close in the second quarter of 2021.
The same is expected to be immediately accretive to the company’s adjusted earnings per share.
Affinity is a Medicaid managed care organization that caters to several members in New York City, Westchester, Orange, Nassau, Suffolk and Rockland counties in New York. Affinity’s premium revenues for the trailing 12 months ending Jul 31, 2020 came in at $1.3 billion. It exited August with around 284,000 Medicaid members.
Rationale Behind the Deal
The move is a perfect fit for the insurance giant, which