Centene bought Magellan Specialty Health, also known as NIA, as part of its acquisition of Magellan Health, Inc. in January 2022. Magellan Specialty Health is a premier specialty benefit management company that provides health plans with industry-leading utilization management solutions such as radiology management, musculoskeletal management, physical medicine management, and genetic testing solutions.
Centene Corporation (NYSE: CNC) announced today that it has agreed to sell Magellan Specialty Health to Evolent Health, Inc. in a formal agreement (Evolent). Centene expects to receive more than $750 million from the sale, subject to typical purchase price adjustments.
Following the transaction’s completion, Centene and Evolent will enter into a multi-year, nationwide strategic partnership in which Centene will continue and grow its engagement with Magellan Specialty Health. Centene will also continue to expand Evolent’s Oncology and End of Life Products, as well as assess other Evolent speciality solutions.
Transaction Details
Centene expects receiving roughly $600 million in closing proceeds, with at least $400 million paid in cash and the remaining paid in Evolent common stock.Moreover, if certain performance benchmarks are reached, Centene will receive up to $150 million in cash and Evolent common stock in 2024. The acquisition is scheduled to close in the first half of 2023, subject to U.S. federal antitrust clearance and other standard closing conditions.
Centene expects to repurchase stock with the majority of the net profits from the sale, with the remainder going toward debt reduction. In the 12-month period following the transaction’s completion, Centene’s Adjusted Earnings Per Share are estimated to be neutral.
