Evolent to Buy Magellan Specialty from Government Insurer Centene for $750M
Centene has agreed to sell Magellan Specialty Health to Evolent Health for more than $750 million, the latest move in its broad value creation plan.
The government insurer will receive $600 million, including at least $400 million in cash and the remainder in stock. Centene will bring in an additional $150 million in 2024 should specific performance metrics be reached.
Most of the net proceeds will be used to repurchase stock and the balance to reduce debt. The transaction is expected to close in the first half of 2023.
Centene added Magellan, a specialty benefit management company, as part of its acquisition of Magellen Health, which closed in January.
Centene announced in October increases in year-over-year profits, logging $738 million in the third quarter of this year, up from $584 million a year ago. Total profits for the nine months ended September 30 were up to $1.4 billion.
J.P. Morgan Securities LLC is serving as financial advisor to Centene, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal counsel. Goldman Sachs is serving as financial advisor to Evolent, and Bass Berry & Sims PLC is serving as its legal counsel.