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 Senior Whole Health, a health maintenance organization serving complex, high-risk populations, providing both Medicare and Medicaid dual-eligible benefits to more than 22,000 members in Massachusetts and New York. That deal allowed Magellan to expand into the Massachusetts Senior Care Options program, as well as further its presence in New York City’s managed long-term care market.
Magellan intends to shift its focus back to behavioral and specialty health, areas it specialized in the 1990s when it was known as Charter Medical Corp. (ticker: CMD), then the country’s largest operator of behavioral health care facilities with 95 hospitals and more than 8,400 beds.
It is keeping its pharmacy benefit manager (PBM), Magellan Rx Management, which will continue the existing PBM relationships within MCC after the sale closes. That’s not expected until the second quarter of 2021.
Molina is bullish on this deal, given its core businesses in Medicaid, high-acuity, and dual-eligibles. With the addition of MCC, Molina will serve more than 3.6 million members in government-sponsored healthcare programs in 18 states and will have 2020 pro-forma projected revenue of over $20 billion.
Molina’s most recent deal was announced in October 2019. It paid $40 million for YourCare Health Plan, Inc., a not-for-profit subsidiary of Monroe Plan for Medical Care, including 46,000 Medicaid members in seven counties in western New York and the Finger Lakes regions.