Molina Healthcare, Inc. (NYSE:MOH) entered into a Stock Purchase Agreement to acquire Central Health Plan of California, Inc. and Universal Care, Inc. from Bright Health Company of California, Inc. for $600 million on June 29, 2023. As reported, the aggregate purchase price for the shares is $600 million in cash, subject to certain adjustments, upward or downward, as applicable. An aggregate of $75 million will be deducted from the purchase price and held in escrow for reconciliation of purchase price adjustments (the ?Adjustment Escrow?) and an aggregate of $10 million will be deducted from the purchase price and held in escrow for certain seller indemnification obligations (the ?Indemnity Escrow?). The amounts in the Adjustment Escrow are subject to release following the completion of a purchase price reconciliation process commencing no later than the later of (x) 225 days after the closing or (y) 45 days after the receipt of certain information. Any amounts remaining in the Indemnity Escrow that have not been offset or reserved for claims are to be released to Bright Health 18 months after the closing. The purchase price for the transaction is approximately $510 million, net of certain tax benefits, which Molina intends to fund with available funds including cash on hand. On December 13, 2023, Molina amended its purchase agreement for the acquisition of Bright HealthCare?s California Medicare business The purchase price for the transaction, net of certain tax benefits, is reduced from the previously announced $510 million to approximately $425 million. If the Agreement is validly terminated by Bright Health then Molina shall pay to Bright Health a termination fee of $30 million. If the Agreement is validly terminated by Molina Healthcare then Bright Health Management shall pay to Molina Healthcare $18 million. The transaction is subject to federal and state regulatory approvals, the solvency and continued operation as a going concern of Bright Health Group throughout the pre-closing period, and other closing conditions. The completion of the transaction is subject to the satisfaction or waiver of certain closing conditions, including, but not limited to, (i) certain regulatory or governmental filings and approvals having been made and obtained, without the imposition by regulatory authorities of a burdensome condition, (ii) The applicable waiting period under the HSR Act shall have expired or been terminated, and any approvals, consents or clearances required in connection with the transactions have been obtained under the HSR Act. The closing of the transaction is expected to occur by early 2024 and is not subject to a financing condition. As per filling on December 18, 2023, the transaction is expected to close on or about January 1, 2024. Proceeds will be used to satisfy Bright Health?s obligations to its bank lenders, with remaining proceeds to be used towards liabilities from its discontinued ACA insurance business.

Atif Azher of Simpson Thacher & Bartlett LLP acted as legal advisor to Bright Health Company of California, Inc. Scott Golenbock of Milbank LLP acted as legal advisor to Molina Healthcare, Inc. Moelis & Company LLC is serving as Bright Health?s financial advisor.

Molina Healthcare, Inc. (NYSE:MOH) completed the acquisition of Central Health Plan of California, Inc. and Universal Care, Inc. from Bright Health Company of California, Inc. for approximately $440 million on January 1, 2024. The acquisition added approximately 109,000 members to Molina.