In one of its larger deals in the past couple of years, Long Beach-based Molina Healthcare Inc. announced on July 13 that it had agreed to acquire Wisconsin’s managed-care Medicaid program for approximately $150 million.
Established in 2000, My Choice Wisconsin serves roughly 44,000 people who are either on core Medicaid programs or relying on related services and support. My Choice Wisconsin delivered about $1 billion in premium revenue for the 12 months ending March 31 of this year.
Molina said it intended to fund the pending purchase with cash on hand, part of an acquisition war chest built up over years of efforts to improve margins and free up more cash.
“The addition of My Choice Wisconsin to Molina’s expanding footprint is not only complementary to our existing Medicaid business in Wisconsin, but also representative of our strategic growth initiatives,” Joe Zubretsky, Molina Healthcare’s chief executive, said in the release. “Today’s announcement demonstrates our continuing success acquiring value enhancing revenue streams at attractive valuations.”
According to the announcement, the deal represents a strong strategic fit with Molina’s portfolio of core Medicaid, high-acuity, and duals (both Medicaid and Medicare) managed care businesses.
Assuming it is approved by all the applicable federal and state regulatory authorities, the transaction is expected to close later this year and, when it does, be immediately accretive to Molina’s adjusted earnings per share.