Magellan Health Services Inc. of Avon announced Monday it plans to spend $100 million to acquire a pharmacy-benefits management company based in Scottsdale, Ariz.
Magellan will pay with cash on hand and the company expects to complete its purchase of Partners Rx, a private company, in the fourth quarter of this year. Partners Rx is a health insurer that offers prescription drug coverage individually through brokers or to workers, through their employers’ third-party administrator, which is typically a health insurance company that manages a self-insured health plan offered by the employer.
The acquisition expands Magellan’s reach in pharmacy benefits, a specialty in which Magellan has said publicly it planned to grow. Partners Rx was founded in 2001 and has about 300,000 people covered in its core commercial business. Partners Rx is expecting annual revenue this year of $240 million.
Robert W. Field will remain as CEO and president of Partners Rx, and he will become CEO of Magellan Pharmacy Solutions, making him responsible for Magellan’s pharmacy product lines.
“Partners Rx is a well-respected [pharmacy benefits management] with a national presence and a growing book of business,” Magellan Health Services CEO Barry M. Smith said in a prepared statement. “With this acquisition, Magellan is enhancing our full-service [pharmacy benefits management] capabilities, adding scale, relationships and expertise, further complementing our unique medical pharmacy and specialty pharmacy capabilities.”
Magellan plans to expand its footprint in the pharmacy marketplace.
Once the acquisition closes, some principal owners of Partners Rx intend to purchase a total of $10 million in Magellan’s restricted stock, which will be subject to vesting during a three-year period.
Magellan Health Services is a health management organization specializing in behavioral health, radiology and pharmacy benefits. The company has 34 million customers in its behavioral health business, 17.4 million in its radiology benefits business and 9 million in medical pharmacy management.
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