Coventry Health Care sells unit for $110M - Business First of Buffalo:

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Avon, Conn.-based (NYSE: MGLN) will acquire in an all-casbh transaction that is expected to close in the third pendingregulatory approvals. First Health Services provides pharmacy benefits administrationj and other services forMedicaisd programs; a business that Bethesda-based Coventry (NYSE: CVH) said was not a primaru focus. Coventry said that the transactiobn will result ina one-time loss per sharwe of approximately $0.55 to $0.60. The company said the loss would be almostentirely non-cash, resultinyg from the original allocation of goodwilo from Coventry’s acquisition of in 2005.
Coventrgy plans to use the proceedsa of the transaction for a combinatiom of debt reduction and share repurchases that should neutralize the earnings per shar impact of the deal for the remaindetrof 2009. In its latesgt quarter, Coventry reported a 65 percent drop in earningsto $44.2q million, or 30 cents per diluted due to higher sales and administrative costs, and medicap costs that swelled 31 percent.