Centene Corporation and Magellan Health Merge

Centene Corporation and Magellan Health Merge

It looks like the healthcare M&A market is off to a strong start for the new year. Centene Corporation (NYSE: CNC), the multi-national managed care giant, has announced the acquisition of Magellan Health, Inc. (NASDAQ: MGLN), a healthcare management company specializing in behavioral health and pharmacy benefits. The deal is valued at $2.2 billion, or $95 per share, a 14.6% premium to Magellan’s closing price of $82.85 on December 31, 2020. Magellan Health has approximately 23.5 million members enrolled under its programs. Once the news broke, Magellan’s shares jumped 11% while Centene’s stock reported a slight uptick. Magellan generated annualized EBITDA of... Read More »
More Medicare Deals Close in May

More Medicare Deals Close in May

In late April, the Social Security and Medicare Trustees released two reports on the financial state of their respective programs, and you’ve probably guessed, the outlook is grim. Without accounting for the adverse economic or health consequences of COVID-19, the organizations find Medicare Part A, which covers inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery, and home health care, will face insolvency in six years. Considering COVID-19 is dealing heavy blows to healthcare services as a whole, it’s fair to say the pandemic is draining funds even faster. However, there is temporary relief for the market. The CARES Act passed by Congress promised... Read More »
Magellan Sells Complete Care to Molina

Magellan Sells Complete Care to Molina

Easy come, easy go. Magellan Health, Inc. (NASDAQ: MGLN) is selling its Magellan Complete Care (MCC) business to Monlina Healthcare, Inc. (NYSE: MOH). The cash purchase price, according to Magellan, is $850 million. According to Molina, it is paying approximately $820 million, net of certain tax benefits. MCC, which had revenue of more than $2.7 billion in 2019 and approximately 155,000 members, manages full-service Medicaid and Medicare health plans including Magellan Complete Care in Arizona, Florida, and Virginia; Senior Whole Health in Massachusetts and New York; and TMG by Magellan in Wisconsin. It wasn’t that long ago (well, July 2017) that Magellan paid $400 million to buy... Read More »

Managed Care Deals Dry Up

Now that the mega-mergers of 2015 have been squashed, deal activity in the Managed Care sector could use a shot in the arm. Through mid-July 2017, only 10 deals have been announced in this sector, on par with 2016’s total of 20 deals. At this rate, it’s unlikely that the sector will reach its 2015 peak of 43 deals. Although 2015 was not a record year, it was the second highest of the century, behind 2000’s total of 47 deals. The Big Four health insurers have ceded the playing field to the smaller players, and financial buyers are stepping in. In 2015, managed care companies accounted for 72% of the 43 deals announced that year and financial buyers only accounted for 5%. Molina... Read More »

What’s Next for Managed Care?

The managed care mega-deals of 2015 have blown up. Aetna (NYSE: AET) and Humana (NYSE: HUM) amicably terminated their $37 billion merger, following a federal judge’s order in January to block the deal on antitrust grounds. The $1 billion termination fee was in the works. A different federal judge blocked Anthem (NYSE: ANTM) and Cigna’s (NYSE: CI) $54.2 billion merger on similar grounds. Things turned ugly quickly, as Cigna declared the deal dead and sued Anthem for the $1.85 billion termination fee, and another $13 billion in damages on behalf of its shareholders. Anthem says it will go ahead with the merger. What do the Big Five health insurers do now that they’re... Read More »