-
Adds greater program and geographic diversification within
government-sponsored programs
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Increases product offering in existing states and expands Medicare
footprint to new states
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Substantial expansion into fast growing Medicare Advantage market
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Transactions expected to be immediately accretive to earnings
following close
LONG BEACH, Calif.--(BUSINESS WIRE)--Aug. 2, 2016--
Molina Healthcare, Inc. (NYSE:MOH) today announced that it has entered
into definitive agreements to acquire certain Medicare Advantage assets
from both Aetna Inc. (NYSE:AET) and Humana Inc. (NYSE:HUM). These
transactions are related to Aetna’s proposed acquisition of Humana.
Molina’s acquisition of such Medicare Advantage assets is subject to CMS
approvals and actions, customary closing conditions including state and
other regulatory approvals, as well as the resolution, in a manner
permitting the acquisition, of the pending litigation brought by the
United States Department of Justice challenging Aetna’s proposed
acquisition of Humana.
“We view this as an exceptional opportunity to significantly expand our
health plan product portfolio in new and existing geographies, while
maintaining our commitment to government-sponsored programs,” said J.
Mario Molina M.D., president and chief executive officer of Molina
Healthcare, Inc. “Medicare Advantage patients require a significant
amount of care coordination. Through our experience in coordinating the
care for members in our existing Medicare Advantage, Medicare Special
Needs, and Medicare-Medicaid Plan offerings, we have developed a unique
understanding of the challenges Medicare patients face every day and the
tools required to provide them with the highest quality of service. This
experience and insight will be invaluable as we integrate and continue
to grow this business. We look forward to working closely with Aetna and
Humana to ensure a smooth transition.”
Under the terms of the agreements, Molina will acquire, in all-cash
transactions, certain assets related to Aetna and Humana’s Medicare
Advantage businesses in 21 states which will result in approximately
290,000 Medicare Advantage members transitioning to Molina.
The consideration for the transactions is currently estimated to be
approximately $117 million, exclusive of any required regulatory
capital, subject to adjustment based on actual membership at closing.
The transactions are expected to be accretive to Molina’s earnings upon
closing. Molina expects to fund the transactions with available cash,
but has also received a debt commitment letter from Barclays in support
of Molina’s financing obligations under the agreements.
As of June 30, 2016, Molina Healthcare served 44,000 Medicare Advantage
Special Needs Plan members and 51,000 Medicare-Medicaid Plan members.
Molina was advised on financial matters by Barclays and on legal matters
by Sheppard, Mullin, Richter & Hampton LLP.
About Molina Healthcare, Inc.
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health
care services under the Medicaid and Medicare programs and through the
state insurance marketplaces. Through our locally operated health plans
in 12 states across the nation and in the Commonwealth of Puerto Rico,
Molina currently serves approximately 4.3 million members. Dr. C. David
Molina founded our company in 1980 as a provider organization serving
low-income families in Southern California. Today, we continue his
mission of providing high quality and cost-effective health care to
those who need it most. For more information about Molina Healthcare,
please visit our website at molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This press release contains “forward-looking
statements” regarding the proposed transactions between Molina
Healthcare and Aetna and between Molina Healthcare and Humana. All
forward-looking statements are based on current expectations that are
subject to numerous risk factors that could cause actual results to
differ materially. Such risk factors include, without limitation, risks
related to: the pending litigation brought by the Department of Justice
challenging Aetna’s acquisition of Humana, the closing of which is a
condition precedent to the consummation of the transactions described
herein; the satisfaction or waiver of closing conditions for the
transactions, including the need to obtain regulatory approvals, satisfy
licensing requirements, and receive other third party consents; any
conditions imposed on the parties by regulators in connection with
consummating the transactions described herein; successfully
transitioning membership into Molina’s health plans and the success of
the transition and administrative services to be provided by Aetna and
Humana to Molina; attrition in membership pending the completion of and
following the transition; maintaining provider relations and potential
medical cost increases resulting from unfavorable changes in contracting
or re-contracting with providers; and the possibility that the
transactions will not be completed on a timely basis or at all.
Additional information regarding the risk factors to which we are
subject is provided in greater detail in our periodic reports and
filings with the Securities and Exchange Commission, including our most
recent Annual Report on Form 10-K. These reports can be accessed under
the investor relations tab of our website or on the SEC’s website at sec.gov.
Given these risks and uncertainties, we cannot give assurances that our
forward-looking statements will prove to be accurate, or that any other
results or events projected or contemplated by our forward-looking
statements will in fact occur, and we caution investors not to place
undue reliance on these statements. All forward-looking statements in
this release represent our judgment as of the date hereof, and we
disclaim any obligation to update any forward-looking statements to
conform the statement to actual results or changes in our expectations
that occur after the date of this release.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160802005734/en/
Source: Molina Healthcare, Inc.
Molina Healthcare, Inc.
Investor Relations:
Juan José
Orellana, 562-435-3666
or
Public Relations:
Sunny Yu,
562-901-1039
