Molina Healthcare Inc. (NYSE: MOH) has agreed to buy the Magellan Complete Care (MCC) line of business of Magellan Health Inc. for approximately $820 million in cash.
Long Beach, Calif-based Molina Healthcare, Inc., a Fortune 500 company, provides managed health care services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, it serves approximately 3.4 million members.
MCC is a managed care organization serving members in six states including Arizona and statewide in Virginia. Through its Senior Whole Health branded plans, MCC provides fully integrated plans for Medicaid and Medicare dual beneficiaries in Massachusetts, as well as managed long-term care in New York. MCC serves approximately 155,000 members, with full year 2019 revenues greater than $2.7 billion. 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.
“Acquiring MCC expands our geographic footprint in our core businesses of managed Medicaid, dual eligibles, and long-term services and supports,” said Joe Zubretsky, president and chief executive officer of Molina, in a statement. “We believe it will allow us to scale our enterprise-wide platforms and benefit from both operating and fixed cost leverage. The acquisition plays to our strengths where our demonstrated operating capabilities put us in a unique position to improve the business’s margins. We will also intensely focus on maintaining the continuity of care for MCC’s members and stability for its state partners. These considerations have added importance in this current and challenging environment.”
The transaction, expected to close in the first quarter of 2021, is subject to federal and state regulatory approvals, and other customary closing conditions.
