The sale is expected to close in the third quarter. As part of the deal, Magellan has agreed to manage radiology services and provide cancer treatment management services in five Coventry markets.
Coventry plans to use the proceeds from the sale to pay back some of its debts and buy back stock. It expects a one-time goodwill impairment charge of 55 to 60 cents per share related to the sale, but because of the buyback, said the deal will be neutral to its per-share profit.
Based on a projected closing date of July 31, Magellan expects a boost of $7.5 million in profit and $60 million in revenue from First Health. That would raise its annual profit by 5 cents per share. In February, Magellan forecast an annual profit of $1.99 to $2.54 per share for the year, on $2.5 billion to $2.6 billion in revenue. Analysts expected earnings of $2.19 per share.
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