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 approximately $71.2 million and $4.69 billion in 2020 annualized revenues.

Following the merger, Centene will have one of the nation’s largest behavioral health platforms across 41 million unique members. Centene expects the transaction to be slightly accretive in the first full year and deliver low to mid-single-digit percent adjusted EPS accretion from the transaction by the second full year, including approximately $50 million in annual net cost synergies projected by the second full year. Centene intends to primarily fund the cash portion of the acquisition through debt financing. The deal is expected to close in the second half of 2021.

The deal comes as a bit of a surprise because Magellan Health just announced an acquisition in late December for Bayless Integrated Healthcare, a leading integrated outpatient behavioral health and primary care provider for an undisclosed sum. Back in May 2020, Magellan sold its Magellan Complete Care business to Molina Healthcare, Inc. (NYSE: MOH) for $850 million.

For its part, Centene announced a deal just back in November for Apixio Inc. to boost its healthcare analytics capabilities. According to search results in our Healthcare Deal Database, the purchase of Magellan is Centene’s largest deal since it bought  WellCare Health Plans, Inc. in March 2019 for $17.3 billion.