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Magellan to buy SWH
Posted on Friday, 14 July 2017 11:11
Magellan Health, via its subsidiary Magellan Healthcare, has agreed to acquire US senior healthcare plans administrator SWH Holdings for around USD 400.00 million in cash, including a USD 10.00 million earn-out if certain performance-related targets are achieved.
The deal provides an exit for private equity firms Council Ventures, SSM and TA Associates.
SWH Holdings is the holding company for Senior Whole Health.
The acquisition will provide Magellan with an opportunity to expand into the Massachusetts senior care options programme and bolster its presence in New York City's managed long-term care market.
Weil Gotshal & Manges is advising the buyer on the purchase.
As of 1st August 2017, Magellan intends to operate managed care plans across three US states, including Florida, New York and Virginia.
Completion is expected by the end of the first quarter of 2018, subject to a number a customary closing conditions, including the green light from the New York State Department of Health, the New York State Department of Financial Services and the termination or expiration of the waiting period under the Hart-Scott Rodino Antitrust Act.
Magellan expects full year 2017 revenue and net profit for SWH of roughly USD 1.00 billion and USD 60.00 million, respectively.
No further details of the transaction were disclosed.
Cambridge-based SWH provides both medicare and medicaid dual-eligible benefits to over 22,000 members across Massachusetts and New York.
Magellan, which is listed on Nasdaq Dubai, manages the delivery of behavioural healthcare treatment services.
Its customers include health plans and other care organisations, employers, labour unions, various military and governmental agencies and third-party administrators.
Last year, Magellan bought US military government management consultant Armed Forces Services for around USD 127.50 million in cash, including a USD 10.00 million earn-out.
The company also signed on the dotted line to pick up Utah-based pharmacy benefit group Veridicus Holdings from private equity firms Gauge Capital and Leavitt Equity Partners for about USD 74.50 million in November 2016.
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