Molina Healthcare Inc. agreed to acquire substantially all the assets of Affinity Health Plan Inc., a Medicaid managed care organization serving members in various counties across New York.

The purchase price for the transaction is about $380 million, net of expected tax benefits and inclusive of an amount representing Molina's target allocation of required regulatory capital. The acquisition price represents less than 30% of premium revenues for the year ended July 31.

The deal, which will be immediately accretive to adjusted EPS, will be funded using cash on hand. The deal, which is expected to complete in the second quarter of 2021, is subject to applicable federal and state regulatory approvals, as well as other customary closing conditions.

As of Aug. 31, Affinity served about 284,000 Medicaid members. The group reported premium revenue of roughly $1.3 billion for the year ended July 31.

The acquisition will provide Molina with a "stable base of membership and revenue", and will deepen its service offerings in New York, CEO Joe Zubretsky said.

Deutsche Bank Securities Inc. acted as financial adviser to Molina, while Milbank LLP, Ropes & Gray LLP and Latham & Watkins LLP served as legal advisers.