Scottsdale managed care giant Magellan Health Inc. said Thursday it had entered into a definitive agreement to sell one of national business units to a California company.
Magellan Health said in a regulatory filing that it has agreed to sell its Magellan Complete Care (MCC) business to managed care company Molina Healthcare Inc., headquartered in Long Beach, for a cash purchase price of $850 million, subject to regulatory approvals and other customary closing conditions. Molina offers Medicaid plans in 13 states plus Puerto Rico.
“The $850 million purchase price is a strong multiple on MCC’s $33 million segment profit in 2019, which reflects the earnings potential of the business we’ve built, a portion of which we are expecting to capture in 2020 as a result of our profitability improvement initiatives,” said Ken Fasola, Magellan Health CEO, in a statement.
“Additionally, the sale eliminates the risk of Magellan’s ability to execute on its MCC profitability improvement initiatives and allows the leadership team to focus on the remaining businesses, improving the services we provide to our customers and members and further enhancing our ability to succeed in these areas.”