Healthcare insurance company Centene on Monday announced that it has reached an agreement to acquire Magellan Health in a transaction with a total enterprise value of $2.2 billion. The deal is expected to be completed in the second half of 2021.
Magellan Health CEO Ken Fasola and other members of the company’s leadership team will join Centene.
The addition of Magellan brings 5.5 million new members to Centene’s government-sponsored plans, as well as:
- 18 million third-party specialty healthcare services customers
- 2 million pharmacy benefit manager (PBM) members
- 16 million medical pharmacy members
As part of the deal, Magellan becomes part of Centene’s Health Care Enterprises, but will continue to support its existing customers independently.
In a news release announcing the agreement, Michael Neidorff, Centene chairman, president and CEO, noted that his organization is familiar with Magellan’s capabilities, as Centene has been one of its customers for years, and added that the two organizations’ “shared commitment to taking care of the most vulnerable populations makes this transaction a natural step.”
Added Fasola: “"We're thrilled to bring together two businesses with complementary capabilities and a shared commitment to driving higher quality care for our members while lowering overall healthcare costs. By joining Centene under the Health Care Enterprises umbrella, we will maintain the independence necessary to ensure continued service to our third-party customers while accelerating the introduction of innovative solutions and reimagining behavioral health.”
Shortly before its deal with Centene, Magellan announced an acquisition of its own in late December. The company completed a deal for a 70% stake in Bayless Integrated Healthcare, an outpatient behavioral health and primary private care provider with eight locations in Arizona.