Magellan Health Services Inc.
) inked a deal to acquire Partners Rx for $100 million. The
acquisition is expected to culminate in the final quarter of
2013, pending closing conditions along with expiration of the
Hart-Scott-Rodino Antitrust Act waiting period.
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Magellan Health intends to fund the acquisition from its
available cash. Strong cash balance well supports its
acquisitions. Additionally, some of the principal owners of
Partners Rx will buy $10 million of Magellan Health's restricted
Headquartered in Scottsdale, AZ, and founded in 2001, Partners Rx
is a full-service commercial pharmacy benefits management company
(PBM), covering more than 0.3 million core commercial PBM lives.
Partners Rx sells its health plans primarily through third party
administrators (TPAs), consultants and brokers.
As part of its growth strategies, Magellan Health undertakes
acquisitions that complement its operations, and contributes
toward strengthening its presence in the pharmacy marketplace.
The acquisition, thus, is a strategic fit for the company,
augmenting its full-service PBM capabilities. Partners Rx is
expected to generate $240 million in revenue in 2013, adding to
Magellan Health's top line that has been exhibiting solid growth.
Following the acquisition, Partners Rx will be a part of Magellan
This acquisition comes after a long gap. Earlier in 2009,
Magellan Health acquired First Health Services Corporation
(''FHS''), FHC, Inc. (''FHC'') and Provider Synergies, LLC for a
total cash consideration of $114.5 million. All these entities
are direct and indirect subsidiaries of Coventry.
Acquisitions have helped Magellan Health widen its portfolio. Via
the inorganic route, the company expanded into radiology benefits
management and specialty pharmaceutical management in 2006, and
into Medicaid administration in 2009.
Among others in the same space, recently
WellCare Health Plans, Inc
) announced its plans to acquire Windsor Health Group Inc. from
German insurer Munich Re AG. for an undisclosed amount. In July,
) entered into an agreement to acquire American Eldercare Inc.
for an undisclosed amount. Earlier, in May,
) closed the acquisition of Coventry Health Care, Inc.
Magellan Health carries a Zacks Rank #3 (Hold).