Molina Healthcare is adding to its string of acquisitions with another Medicaid managed care organization. The insurer said on Tuesday that it has reached a definitive agreement to acquire Affinity Health Plan’s assets for about $380 million in cash.
New York-based Affinity serves about 284,000 Medicaid members in New York City and the surrounding counties of Westchester, Orange, Nassau, Suffolk and Rockland. It’s been in the business for 35 years. The company brought in about $1.3 billion in premium revenue for the 12 months ending on July 31.
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Molina’s President and CEO, Joe Zubretsky, said the deal would deepen Molina’s offerings in New York, and give it a stable source of membership and revenue in that market.
“The addition of Affinity is yet another important marker in activating our growth strategy, and is a perfect product line and geographic fit,” he said in a news release. “We believe Molina’s strengths, including its strong balance sheet and demonstrated operating capabilities, will allow us to strengthen the financial base of Affinity and improve the business’s cost structure and operating margins.”
Earlier this year, Molina announced plans to acquire other Medicaid MCOs, including Magellan Complete Care and Passport Health Plan. With its acquisition of Magellan, Molina would expand across six states, including new markets in Arizona, Massachusetts and Virginia. The acquisition of Passport Health would also jump start Molina’s new Medicaid contract with the state of Kentucky.
Molina expects the Affinity acquisition to close in the second quarter of 2021, subject to federal and state regulatory approvals.
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