WellCare office in Albany, NY. Credit: Google Street View
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.
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.