Transaction
to Continue to Bring Superior Benefits to Members in Texas
Synergistic
Business to be Immediately Accretive to Molina’s Adjusted Earnings Per Share
April 22, 2021 04:15 PM Eastern Daylight Time
LONG BEACH, Calif. & BLOOMFIELD, Conn.--(BUSINESS WIRE)--Molina Healthcare, Inc.
(NYSE: MOH) and Cigna Corporation (NYSE: CI) today announced that they have
entered into a definitive agreement pursuant to which Molina will acquire
Cigna’s Texas Medicaid and Medicare-Medicaid Plan (MMP) contracts and certain operating
assets. As of December 31, 2020, Cigna’s Texas Medicaid and MMP business served
approximately 48,000 Medicaid members in the STAR+PLUS program in the Hidalgo,
Tarrant, and Northeast service areas, and approximately 2,000 MMP members in
the Hidalgo service area, with full year 2020 premium revenue of approximately
$1.0 billion.
“Acquiring Cigna’s
Texas Medicaid business provides us with a stable base of membership and
revenue that will deepen Molina’s service offerings in Texas, allowing us to
meet the needs of thousands of additional Medicaid and MMP members. The
transaction demonstrates continued execution and is nicely representative of
our growth strategy.”
Molina said in a statement: “Acquiring Cigna’s Texas Medicaid
business provides us with a stable base of membership and revenue that will
deepen Molina’s service offerings in Texas, allowing us to meet the needs of
thousands of additional Medicaid and MMP members. The transaction demonstrates
continued execution and is nicely representative of our growth strategy.”
Cigna said in a statement: “We are proud of the positive impact
we have made on customer lives through our Texas Medicaid business, and are
confident that Molina will build on our work to improve their health,
well-being, and peace of mind. We remain fully committed to the state of Texas,
and look forward to continuing to bring affordable, predictable, and simple
health care solutions to the millions of Texans we serve through our Medicare,
Commercial, and Health Services businesses.”
The purchase price for the transaction is approximately $60
million and Molina intends to fund the purchase with cash on hand. The
transaction is expected to be immediately accretive to Molina’s adjusted
earnings per share. The transaction is subject to receipt of applicable federal
and state regulatory approvals and the satisfaction of other customary closing
conditions. It is expected to close in the second half of 2021.
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 4.0 million members as of December 31, 2020.
For more information about Molina Healthcare, please visit molinahealthcare.com.
About Cigna
Cigna Corporation is a global health service company dedicated
to improving the health, well-being and peace of mind of those we serve. Cigna
delivers choice, predictability, affordability and access to quality care
through integrated capabilities and connected, personalized solutions that
advance whole person health. All products and services are provided exclusively
by or through operating subsidiaries of Cigna Corporation, including Cigna
Health and Life Insurance Company, Connecticut General Life Insurance Company,
Evernorth companies or their affiliates, and Express Scripts companies or their
affiliates. Such products and services include an integrated suite of health
services, such as medical, dental, behavioral health, pharmacy, vision,
supplemental benefits, and other related products. Cigna maintains sales
capability in over 30 countries and jurisdictions, and has more than 175
million customer relationships throughout the world. To learn more about
Cigna®, including links to follow us on Facebook or Twitter, visit www.cigna.com.
Safe Harbor Statement of Molina under the
Private Securities Litigation Reform Act of 1995
This press release contains “forward-looking statements”
regarding the proposed acquisition by Molina of certain assets relating to
Cigna’s Texas Medicaid and MMP business. 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 following:
i.
the possibility that
the proposed transaction will not be completed on a timely basis or at all;
ii.
the risk that regulatory
or other approvals required for the proposed transaction may be delayed or not
obtained, or are obtained subject to conditions that are not anticipated;
iii.
potential business
changes required in connection with complying with any undertakings in connection
with regulatory, governmental, or third-party consents or approvals for the
proposed transaction;
iv.
the disruption from
the announcement, pendency, and/or completion of the proposed transaction,
including potential adverse reactions or changes to business relationships with
customers, suppliers, or regulators, making it more difficult to maintain
business and operational relationships;
v.
the possible attrition
in Cigna’s Medicaid and MMP membership pending the completion of and following
the closing of the proposed transaction;
vi.
the risk that Molina
is unable to successfully retain or integrate the employees and operations of
Cigna Medicaid and MMP;
vii.
the possibility that
the expected synergies and value creation from the proposed transaction will
not be realized, or will not be realized to the extent expected or within the
expected time period;
viii.
the risk that
unexpected costs will be incurred in connection with the completion and/or
integration of the proposed transaction or that the integration of the acquired
assets will be more difficult or time consuming than expected;
ix.
the difficulty of
maintaining provider relations and managing potential medical cost increases
resulting from unfavorable changes in contracting or re-contracting with
providers; and
x.
the uncertainty around
the duration of the COVID-19 pandemic and the ultimate impact thereof on the
benefits Molina expects to realize from the proposed transaction.
Additional information regarding the risk factors to which
Molina is subject is provided in greater detail in its periodic reports and
filings with the Securities and Exchange Commission, including its most recent
Annual Report on Form 10-K. These reports can be accessed under the investor
relations tab of Molina’s website or on the SEC’s website at sec.gov. Given
these risks and uncertainties, Molina cannot give assurances that its
forward-looking statements will prove to be accurate, or that any other results
or events projected or contemplated by its forward-looking statements will in
fact occur, and Molina cautions investors not to place undue reliance on these
statements. All forward-looking statements in this release represent Molina’s
judgment as of the date hereof, and it disclaims any obligation to update any
forward-looking statements to conform the statement to actual results or
changes in its expectations that occur after the date of this release. Given
these risks and uncertainties, Molina can give no assurances that its
forward-looking statements will prove to be accurate, or that any other results
or events projected or contemplated by its forward-looking statements will in
fact occur, and it cautions investors not to place undue reliance on these
statements. All forward-looking statements in this release represent Molina’s
judgment as of the date of this press release, and, except as otherwise
required by law, Molina disclaims any obligation to update any forward-looking
statements to conform the statement to actual results or changes in its
expectations.
Contacts
Investor Contact: Julie Trudell, Julie.Trudell@molinahealthcare.com,
562-912-6720
Media Contact: Caroline Zubieta, Caroline.Zubieta@molinahealthcare.com,
562-951-1588
No comments:
Post a Comment