UPDATE 2-Magellan Health to buy Coventry unit for $110 mln
* Magellan Health sees deal adding $0.05 to EPS in 2009
* Magellan Health inks 3-year service deals with Coventry
* Magellan Health shares rise almost 7 pct
(Adds Magellan Health comments from conference call, updates share movement)
June 5 (Reuters) - Magellan Health Services Inc (MGLN.O: Cotización) said it agreed to buy a unit of insurer Coventry Health Care Inc CVH.N for $110 million in order to expand its Medicaid capabilities.
Magellan Health, which provides a network of doctors and hospitals to its members, expects the transaction to add 5 cents a share to its 2009 earnings.
The company said it expects Coventry's unit First Health Services Corp to generate revenue of about $60 million and segment profit of $7.5 million for the five months of 2009 post acquisition.
First Health Services provides pharmacy benefits administration (PBA), health care management, and IT services to state Medicaid programs.
"We see the greatest growth potential in First Health Services' pharmacy benefits administration business, and this is our primary driver in the acquisition," Magellan Health's Chief Executive Rene Lerer said on a conference call. Continuación...