Magellan Health Services, Avon, Conn., announced plans this week to acquire CDMI, a privately held Newport, R.I.-based provider of clinical consulting programs that also negotiates and administers drug rebates for managed-care
organizations and other clients.Acquisition
of CDMI is expected to enhance Magellan's clinical programs and outreach services for managing chronic conditions, as well as broaden its Magellan Rx Management clinical specialty drug and medical management support capabilities. It also will create opportunities to grow and scale the business by tapping into CDMI's existing customer base, according to a company release.
Founded by pharmacy executives in 2009, CDMI works with more than 30 health plans and had net revenues of about $43 million in 2013. George Petrovas, CDMI's co-founder and executive vice president, will move into the president role at CDMI, which will operate under Magellan Rx Management.
“CDMI and Magellan Rx Management have similar cultures and a persistent focus on their customers. I'm pleased that we'll be joining Magellan during this exciting period of growth,” Petrovas said in a release
. “CDMI's clinical products, services and relationships will supplement Magellan Rx Management's suite of industry-leading pharmacy offerings and products as we work together to grow this business.”
Magellan has agreed to pay $205 million for CDMI—$125 million in cash and $80 million to be reinvested in Magellan restricted common stock by CDMI's principal owners and certain key management. There is also up to an additional $165 million available in potential contingent payments. Subject to customary closing conditions, the transaction is expected to be completed in the second quarter of 2014.Follow Rachel Landen on Twitter: @MHrlanden