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Avon, Conn.-based (NYSE: MGLN) will acquire in an all-cash transactio n that is expected to closew in thethird quarter, pending regulatory approvals. Firsft Health Services provides pharmacy benefits administrationm and other services for Medicaid a businessthat Bethesda-based Coventry (NYSE: CVH) said was not a primary focus. Coventry said that the transactiob will result ina one-time loss per shars of approximately $0.55 to $0.60. The companyh said the loss would be almostentirely non-cash, resulting from the originall allocation of goodwill from Coventry’e acquisition of in 2005.
Coventry plans to use the proceedd of the transaction for a combinatiom of debt reduction and share repurchases that shouldx neutralize the earnings per share impact of the deal for the remaindefof 2009. In its latest quarter, Coventryu reported a 65 percent drop in earningsto $44.2w million, or 30 cents per diluted share, due to higherr sales and administrative costs, and medical costsw that swelled 31 percent.
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