Molina Healthcare to Enter Missouri Market With Acquisition of Mercy CarePlus
Molina Healthcare, Inc. (NYSE: MOH) today announced that it has entered into a definitive agreement to acquire Mercy CarePlus, a Medicaid managed care organization based in St. Louis, Missouri. The purchase price for the acquisition of all of the company’s outstanding limited liability company units is approximately $74 million, net of retained cash, and is subject to certain adjustments. The transaction will be funded with available cash and Molina Healthcare’s credit facility. The acquisition is expected to close in the fourth quarter of 2007, subject to regulatory approval and the satisfaction of other standard closing conditions.
“We are pleased to make our initial entry into the Missouri marketplace through an entity with strong roots in the community. We look forward to providing quality healthcare and access to our new Mercy CarePlus members and to partnering with the State of Missouri as its expands its Medicaid managed care program in 2008,” said J. Mario Molina, MD, Molina Healthcare’s president and chief executive officer. “This transaction further reinforces our commitment to the Medicaid program, allows us to continue to diversify our revenue and provides an entry portal to a growing market. It is also consistent with our strategy of further diversifying our revenue among additional states and pursuing accretive transactions where possible.”
Mercy CarePlus currently serves approximately 61,600 Medicaid and 6,100 CHIP members in Missouri who qualify for the state’s Medicaid managed care program, known as MC+ Managed Care. Effective January 1, 2008, the state will introduce the MC+ Managed Care program in 21 additional Missouri counties ranging across all three of the state’s managed care regions. The expanded MC+ Managed Care program will provide service for approximately 46,000 additional participants who will be required to select a managed care health plan.
Molina Healthcare’s management will discuss the acquisition during its upcoming Investor Day conference starting at 8:30 a.m. Eastern Time on Wednesday, September 12, 2007. A live webcast of the conference can be accessed on Molina Healthcare’s website at www.molinahealthcare.com. An online replay of the webcast will be available beginning approximately one hour following the conclusion of the live webcast.
About Molina Healthcare
Molina Healthcare, Inc. is a multi-state managed care organization that arranges for the delivery of healthcare services to persons eligible for Medicaid and other government-sponsored programs for low-income families and individuals. Molina Healthcare, Inc. currently operates health plans in California, Michigan, New Mexico, Ohio, Texas, Utah, and Washington. More information about Molina Healthcare, Inc. can be obtained at www.molinahealthcare.com.
About Mercy CarePlus
Mercy CarePlus is a managed care organization that delivers healthcare services through the MC+ Managed Care program to residents in each of the Eastern, Central, and Western regions of Missouri. More information about Mercy CarePlus can be obtained at www.mercycareplus.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:Â This press release contains “forward-looking statements” that are subject to risks and uncertainties that may cause actual results to differ materially. Such factors include risks related to the obtaining of regulatory approvals for the acquisition and the satisfaction of other conditions to closing; the successful integration of the members, operations, and provider networks of Mercy CarePlus; attrition in membership pending the completion of the acquisition; provider relations; the ability of Molina Healthcare to finance the acquisition at closing; the accurate estimation of incurred but not reported medical costs; the successful renewal of the plan’s government contracts; and numerous other risk factors as discussed in the periodic reports and filings of Molina Healthcare with the Securities and Exchange Commission and available for viewing on its website at www.sec.gov.