Buyer: Molina Healthcare, Inc.
Seller: AgeWell New York
Keywords: Molina Healthcare, AgeWell New York, Homecare, Hospice, Joe Zubretsky
LONG BEACH, Calif.–(BUSINESS WIRE)–Molina Healthcare, Inc. (NYSE: MOH) 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.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 4.7 million members as of June 30, 2021. For more information about Molina Healthcare, please visit molinahealthcare.com.
The M&A market for healthcare companies continues to strengthen in 2021 and ahead of the projected increases in US capital gains taxes. There is unprecedented capital in market, the lowest interest rates in US history and strong acquirer motivations for high quality healthcare companies. Across the continuum of care, buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
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