Molina Healthcare is expecting to add $1.8 billion in premium revenue from its acquisition of Bright Healthcare's 125,000-member Medicare Advantage business.
In June, Molina said it would acquire Bright Healthcare's California Medicare Advantage business for $600 million.
On a July 27 call with investors, Molina Healthcare CEO Joseph Zubretsky said the company expects to add $1 in earnings per share through the acquisition, but the purchase won't add additional earnings in its first year.
Mr. Zubretsky said the company is not sure exactly when the acquisition will begin to deliver profits.
"We are still confident that whatever is delivered to us at the time of closing, we will be able to get that to our target margins by the end of the second year," Mr. Zubretsky said. "So … we said no earnings contribution early because we don't know exactly what the financial status, the margin status of the plan that will be delivered to us will be at the time of closing."
Molina will finance the deal with cash on hand. The sale, subject to regulatory approval, is expected to close in the first quarter of 2024.