Molina Healthcare has entered into an agreement to acquire Affinity Health Plan in a deal valued at $380 million.
Affinity is a Medicaid managed care organization serving about 284,000 members in New York City and Westchester, Orange, Nassau, Suffolk and Rockland counties in New York state. Its premium revenue for the 12 months ending July 31 was $1.2 billion, according to the announcement.
Molina said it plans to purchase Affinity with cash on hand.
“The addition of Affinity is yet another important marker in activating our growth strategy, and is a perfect product line and geographic fit. 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,” said Joseph Zubretsky, president and CEO of Molina, in a statement.
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“The acquisition of Affinity provides us with a stable base of membership and revenue and will deepen Molina’s service offerings in New York, allowing us to meet the needs of hundreds of thousands of additional Medicaid members," Zubretsky said. "The transaction provides added stability to Affinity’s Medicaid members and its state partner during this critical time.”
Molina expects the deal to close in the second quarter of 2021, pending regulatory approvals.
Molina has announced multiple deals in the past several months that it expects to contribute to its growth plans.
In July, it unveiled plans to acquire Passport Health's Medicaid and dual eligibles business lines, and in April announced it would buy Magellan Complete Care from Magellan Health in an $820 million deal.