Centene closes $2.2B acquisition of Magellan Health

Dive Quick:

• Centene has completed its $2.2 billion acquisition of managed treatment corporation Magellan Overall health, transferring the insurer further into the behavioral health and fitness house, the enterprise explained Tuesday.
• Centene and Magellan cleared all regulatory hurdles, equally at the state and federal level, a condition of closing the deal. Magellan will work independently less than the Centene umbrella and will proceed to be led by CEO Ken Fasola.
• As a leader in authorities-sponsored programs, Magellan will insert 5.5 million users and improve Centene’s recognized existence in specialty healthcare and pharmacy management.

Dive Insight:

The pandemic highlighted the will need for higher obtain to psychological wellness providers as quite a few men and women described emotion anxious and frustrated. The deal is intended to support St. Louis-primarily based Centene treatment for the “total man or woman” and not just the actual physical overall health of its customers, according to administration.

“Magellan will broaden Centene’s reach to provide increased accessibility to behavioral healthcare for our customers at a time when so several People are battling with mental or behavioral well being troubles,” Centene CEO Michael Neidorff said in a assertion.

SVB Leerink analysts have previously reported Phoenix-dependent Magellan is a “very good strategic in good shape for [Centene], offered its experience giving healthcare providers to underserved and medically advanced populations,” in accordance to notice next the announcement of the offer in 2021.  

A portion of the inhabitants — usually sick and intricate patients — consumes a disproportionate amount of money of health care expending. The deal with Magellan will help rein in that paying, Centene explained.

The closing comes at a tumultuous time for Centene. Following 25 years at the helm, Neidorff will be stepping down this 12 months just after force from activist trader team, Politan Cash Administration, which has also secured a shakeup to the board. 

Centene is also reevaluating its portfolio and looking to offload non-main property, which includes its worldwide business enterprise. The insurer recently bought its greater part stake in U.S. Medical Administration, a home treatment provider.