The sales process for public managed care company and pharmacy benefits manager Magellan Health is moving forward, with potential acquirers including Anthem and UnitedHealth Group.
DealBreaker initially reported the news that the bidding process has advanced to the second round with the two insurance companies emerging as leading suitors, along with private equity firm The Carlyle Group.
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Analysts say the Scottsdale, Arizona-based company’s mix of assets – which ranges from a Managed Medicaid business and radiology and behavioral health benefits – could be a benefit to a strategic investors looking to broaden their payer portfolio.
“We see Anthem and UnitedHealth Group as the most likely buyers in light of their synergies with Medicaid in Complete Care, and the PBM across IngenioRx and OptumRx.,” SVBLeerink analyst Ana Gupte wrote in a research note.
“OptumRx is seeking specialty Rx and we expect UnitedHealth is looking for regional players to shore up Medicaid. Anthem is poised as well to build their third-party services platform.”
After a very public spat with Express Scripts, Anthem decided to develop its own internal PBM called IngenioRX. Adding on Magellan’s service could bolster its activity in specialty pharmacy and clinical management capabilities.
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Magellan Health has been under pressure from activist investors to sell itself as a pathway to boost value in the face of a falling stock price. Magellan’s stock is down more than 40 percent from a year ago, but has jumped up on the recent news of a potential sale. The company’s market cap is around $1.5 billion.
Last month, the company agreed to a deal with activist investor Starboard Value LP to add four new independent directors to join the company’s board adding fuel to the rumors about an acquisition. Starboard owns around a 9.8 percent stake in the company.
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