We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WellCare Health Plans, Inc. recently announced completing its pending acquisition of Meridian Health Plan of Michigan, Inc., Meridian Health Plan of Illinois, Inc. and MeridianRx, together known as the Meridian. The transaction was effective Sep 1, 2018 and the deal was fixed at an approximate value of $2.5 billion.
On closing the buyout, Meridian now becomes a subsidiary of WellCare. The acquirer expects to enhance its Medicare Advantage platform in the markets as well as diversify the Medicaid membership by around 40 %. It is also expected that this much-awaited consolidation will add a proprietary PBM platform to the company’s portfolio and further fuel its integrated dual-eligible and Marketplace capabilities, which in turn, would definitely push growth in government-sponsored programs.
With both companies sharing commitment toward providing quality plans and counting on Meridian’s above 20-year enriched experience, the transaction should enable WellCare to leverage the best practices in healthcare service sector. Moreover, the buyout is expected to produce 40-50 cents of accretion to the company’s adjusted earnings per share in 2019 followed by 70-80 cents in 2020 and more than $1 of addition in 2021, consisting of $30-$40 million in synergies, which will eventually improve. However, it is exclusive of one-time transaction-related expenses of $75-$85 million and the cumulative integration-related costs of $50-$60 million.
This would even intensify the company’s constant focus on government-sponsored managed care services. Moreover, the deal is believed to bolster WellCare’s position in one of the fastest-growing markets within the managed care space. The combined Medicare Advantage would cover a total of 21 states as Michigan, Indiana and Ohio would be added to WellCare’s existing portfolio.
WellCare has substantially grown since 2013 through solid acquisitions and mergers. In 2017, it completed the purchase of Universal American Corp and Arizona Medicaid assets of Phoenix Health Plan. It is encouraging to know that the company is expecting to generate more than $4.3 billion in 2018 total revenues from Meridian’s businesses.
More and more companies are resorting to mergers and acquisitions activity for expanding their business in the medical industry. Recently, UnitedHealth Group Incorporated (UNH - Free Report) announced that its Optum segment is going to buy Sound Physicians along with a private equity firm. Notably, Anthem, Inc. has already completed the integration of Aspire Health for improving the quality of its healthcare as well as enhancing capabilities. Earlier in the year, Humana Inc. (HUM - Free Report) along with private-equity partners bought Kindred Healthcare (KND) to extend into patientcare.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
WellCare (WCG) Buys Meridian, Boosts Medicaid Membership
WellCare Health Plans, Inc. recently announced completing its pending acquisition of Meridian Health Plan of Michigan, Inc., Meridian Health Plan of Illinois, Inc. and MeridianRx, together known as the Meridian. The transaction was effective Sep 1, 2018 and the deal was fixed at an approximate value of $2.5 billion.
On closing the buyout, Meridian now becomes a subsidiary of WellCare. The acquirer expects to enhance its Medicare Advantage platform in the markets as well as diversify the Medicaid membership by around 40 %. It is also expected that this much-awaited consolidation will add a proprietary PBM platform to the company’s portfolio and further fuel its integrated dual-eligible and Marketplace capabilities, which in turn, would definitely push growth in government-sponsored programs.
With both companies sharing commitment toward providing quality plans and counting on Meridian’s above 20-year enriched experience, the transaction should enable WellCare to leverage the best practices in healthcare service sector. Moreover, the buyout is expected to produce 40-50 cents of accretion to the company’s adjusted earnings per share in 2019 followed by 70-80 cents in 2020 and more than $1 of addition in 2021, consisting of $30-$40 million in synergies, which will eventually improve. However, it is exclusive of one-time transaction-related expenses of $75-$85 million and the cumulative integration-related costs of $50-$60 million.
This would even intensify the company’s constant focus on government-sponsored managed care services. Moreover, the deal is believed to bolster WellCare’s position in one of the fastest-growing markets within the managed care space. The combined Medicare Advantage would cover a total of 21 states as Michigan, Indiana and Ohio would be added to WellCare’s existing portfolio.
WellCare has substantially grown since 2013 through solid acquisitions and mergers. In 2017, it completed the purchase of Universal American Corp and Arizona Medicaid assets of Phoenix Health Plan. It is encouraging to know that the company is expecting to generate more than $4.3 billion in 2018 total revenues from Meridian’s businesses.
More and more companies are resorting to mergers and acquisitions activity for expanding their business in the medical industry. Recently, UnitedHealth Group Incorporated (UNH - Free Report) announced that its Optum segment is going to buy Sound Physicians along with a private equity firm. Notably, Anthem, Inc. has already completed the integration of Aspire Health for improving the quality of its healthcare as well as enhancing capabilities. Earlier in the year, Humana Inc. (HUM - Free Report) along with private-equity partners bought Kindred Healthcare (KND) to extend into patientcare.
Shares of WellCare have soared 77.6%, outperforming its industry’s surge of 34.3%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>