MOH - Molina Healthcare announces a $600 million deal with Bright Health
2023-07-02 14:57:32 ET
Molina Healthcare Inc ( NYSE: MOH ) is buying the California Medicare Advantage business from Bright Health Group Inc ( NYSE: BHG ).
Details of the Bright Health-Molina agreement
On Friday, the managed care company said it will pay $600 million in total for the deal that also includes BHG’s Brand New Day and Central Health Plan of California.
The definitive agreement will deliver a significant boost to Bright Health’s capital position. In a press release , its CEO Mike Mikan said:
The sale allows us to focus on driving differentiation and sustainable growth through our Consumer Care Delivery business.
Last month, Bright Health Group Inc reported $169 million of loss for its first financial quarter. At writing, the healthcare stock is down about 85% versus its year-to-date high.
Here’s how BHG plans on using the proceeds?
The transaction is expected to close in early 2024 provided that it secures regulatory approval. According to the press release Bright Health published on Friday:
As part of agreement, Bright Health’s Consumer Care Delivery business will enter into a provider agreement with Molina to serve Medicaid and ACA Marketplace populations in Florida and Texas in 2024.
The New York listed firm plans on using part of the proceeds from this sale to fulfil the terms of its agreement with the bank lenders. Remaining, it added, will go to liabilities related to its discontinued ACA insurance business.
BHG had initially revealed plans of offloading the California Medicare Advantage business in April.
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