WellCare Health to buy Meridian Health Plans for $2.5 billion

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WellCare Well being Plans mentioned on Tuesday it might purchase Meridian Well being Plans of Michigan and Illinois for $2.5 billion in money to develop into the highest Medicaid supplier in these states.

The deal will assist WellCare add about 1.07 million Medicaid members in Michigan and Illinois and contains the acquisition of pharmacy profit supervisor MeridianRx, WellCare mentioned in an announcement.

“This transaction strategically aligns with our give attention to government-sponsored well being plans…,” WellCare Chief Govt Officer Ken Burdick mentioned in an announcement.

Meridian’s companies are anticipated to generate greater than $four.three billion in complete income in 2018, WellCare mentioned.

The deal comes as health-care payers and pharmacies are responding to a shifting panorama, together with adjustments within the Inexpensive Care Act, rising drug costs and the specter of competitors from on-line retailers reminiscent of Amazon.com.

In December, U.S. drugstore chain operator CVS Well being agreed to purchase U.S. well being insurer Aetna Inc for $69 billion, in search of to deal with hovering healthcare spending via lower-cost medical companies in pharmacies.

U.S. retailer Walmart was reported to have been in early-stage talks in March with well being insurer Humana Inc about growing nearer ties.

The WellCare-Meridian deal would add 40 to 50 cents per share to WellCare’s adjusted earnings in 2019, 70-80 cents per share in 2020, and greater than $1.00 per share in 2021.

WellCare mentioned it anticipated to fund the transaction via money available, in addition to from issuing new fairness of as much as $1.2 billion and debt of as much as $1 billion.

The corporate additionally mentioned it had secured $2.5 billion in dedicated bridge financing

Supply hyperlink – https://www.cnbc.com/2018/05/30/wellcare-health-to-buy-meridian-health-plans-for-2-point-5-billion.html

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