By Leslie Small
Magellan Health Inc. — a company with behavioral health,
Medicaid managed care and PBM assets — is striving to turn its business around
after a challenging 2018 that has stirred speculation it's primed for a sale.
In fact, on Feb. 22 the hedge fund Starboard Value — which owns
approximately 9.8% of Magellan shares — sent an open letter to the company’s
shareholders suggesting new candidates for its board of directors and urging
Magellan management to explore selling all or part of the company.
If Magellan does end up getting sold, certain aspects of its
business could greatly benefit whichever managed care company ends up being the
highest bidder, industry experts say.
"[Magellan] has a unique mix of assets," Jefferies
analyst David Styblo wrote in a Feb. 20 research note, pointing out that
"the insurance business includes some Managed Medicaid as well as
radiology and behavioral benefits." Magellan's PBM, meanwhile, "could
be sold as standalone," which "could be interesting for companies
wanting to enhance their medical pharmacy and clinical management
capabilities," Styblo wrote.
As for which companies might buy all or part of Magellan,
Leerink analyst Ana Gupte advised investors that Anthem, Inc. and UnitedHealth
Group could be the most likely strategic buyers, "in light of their
synergies with Medicaid in Complete Care, and the PBM across IngenioRx and
OptumRx." Another possibility is that a private-equity firm could purchase
Magellan, Gupte added.
From Health Plan Weekly
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