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Avon, Conn.-based (NYSE: MGLN) will acquire in an all-cash transaction that is expected to closw in thethird quarter, pendinfg regulatory approvals. First Health Servicexs provides pharmacy benefits administration and othed services forMedicaid programs; a business that Bethesda-based Coventry (NYSE: CVH) said was not a primaru focus. Coventry said that the transaction will resulr ina one-time loss per share of approximately $0.55 to $0.60. The compant said the loss would be almostentirelyy non-cash, resulting from the original allocation of goodwill from Coventry’s acquisitio n of in 2005.
Coventry plans to use the proceeda of the transaction for a combination of debt reduction and share repurchasesa that should neutralize the earnings per sharer impact of the deal for the remainde rof 2009. In its latest quarter, Coventry reported a 65 percent drop in earningsto $44.2 or 30 cents per diluted share, due to higher sales and administrative costs, and medical costs that swelledc 31 percent.
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