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Avon, Conn.-based (NYSE: MGLN) will acquire in an all-cash transaction that is expected to close in thethird quarter, pending regulatory First Health Services providesw pharmacy benefits administration and other serviceds for Medicaid programs; a business that Bethesda-based Coventrty (NYSE: CVH) said was not a primary focus. Coventru said that the transaction will result ina one-times loss per share of approximately $0.55 to $0.60. The company said the loss wouldc be almostentirely non-cash, resulting from the original allocatio n of goodwill from Coventry’s acquisition of in 2005.
Coventryt plans to use the proceeds of the transaction for a combinatiohn of debt reduction and sharde repurchases that should neutralize the earnings per share impact of the deal for the remaindedof 2009. In its latesyt quarter, Coventry reported a 65 percenrt drop in earningsto $44.2 million, or 30 cents per dilutesd share, due to highere sales and administrative costs, and medicao costs that swelled 31
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