WellCare Health Plans revealed Tuesday that, effective September 1, it has completed its acquisition of Meridian Health Plan of Michigan, Meridian Health Plan of Illinois, and MeridianRx, a pharmacy benefit manager.
The company received the of all required regulatory approvals, and so with the closing of the acquisition, Meridian is now a wholly-owned subsidiary of WellCare.
The acquisition was first announced in May, with the deal worth an estimated $2.5 billion. WellCare said at the time that it would have the top Medicaid membership market share in Michigan and Illinois, increasing its leading market position from four to six states.
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WellCare's Medicaid membership is expected to grow by about 40 percent, and its Medicare Advantage presence will likely expand to new markets. A new proprietary PBM platform will be added, and WellCare CEO Ken Burdick said he expects the company to be well-positioned for further growth within government-sponsored programs.
The transaction is expected to produce $0.40 to $0.50 of accretion to WellCare's adjusted earnings per share in 2019, $0.70 to $0.80 of accretion in 2020, and $1.00-plus of accretion in 2021.
That's inclusive of $30 million to $40 million in synergies that will ramp up over the next few years, and exclusive of one-time transaction-related expenses of $75 million to $85 million, as well as cumulative integration-related expenses of $50 million to $60 million.
Meridian was one of the largest privately-held, for-profit managed care organizations in the U.S. and served about 1.1 million Medicaid, Medicare Advantage, integrated dual-eligible and Health Insurance Marketplace members as of June 30 in Michigan, Illinois, Indiana and Ohio.