The biggest US health insurer and a top private-equity firm are likely buyers of $1.6 billion Magellan Health
Joe Raedle/Getty ImagesMagellan Health has a pharmacy-benefits business and a healthcare unit that offers insurance and other services.
- Magellan Health is likely to be acquired by UnitedHealth Group or Carlyle Group for about $85 to $90 a share, according to Ana Gupte, an analyst at SVB Leerink.
- Magellan has a pharmacy-benefits business and a healthcare unit that offers insurance and other services, such as behavioral health.
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Magellan Health is likely to be acquired by UnitedHealth Group or by the private equity firm Carlyle Group, according to Ana Gupte, an analyst at SVB Leerink.
Gupte said she expects an announcement within the next month, or by the end of September at the latest. She said she expects Magellan Health to be acquired for about $85 to $90 a share. The stock was trading at $65.91 on Monday, giving Magellan a market value of $1.6 billion.
Magellan has a pharmacy-benefits business and a healthcare unit that offers insurance and other services, such as behavioral health. Gupte said the addition of Magellan would bolster UnitedHealth's offerings in behavioral health, and help boost the company's geographic reach in states including Florida, Arizona, and Virginia. UnitedHealth runs the biggest health insurer in the US and also has a major pharmacy-benefits business.
"Magellan is a good strategic fit for UnitedHealth across both the pharmacy" and insurance businesses, Gupte wrote.
Dealreporter previously reported that the health insurer Anthem and Carlyle were interested in acquiring Magellan.
Anthem on June 6, announced the purchase of Beacon Health Options, which provides behavioral health services. With Anthem's recent announcement, the company is unlikely to acquire Magellan, Gupte said.
Magellan Health has been under pressure from the hedge fund Starboard Value to improve performance and sell itself, Reuters reported earlier this year.
The company is struggling to compete because it's much smaller than rivals, particularly in the pharmacy-benefits business, Gupte said. CVS Health acquired Aetna late last year and Cigna combined with Express Scripts.