Magellan Health Services plans to use proceeds from the sale of its remaining behavioral healthcare provider operations to expand its managed-care and disease management businesses.
"The sale provides us with a nice platform for expansion into oncology, diabetes and other specialty disease management," said Robert Mead, Magellan's spokesman.
Atlanta-based Magellan agreed last week to sell what remains of its provider operations to Charter Behavioral Health Systems, also of Atlanta, and Crescent Operating of Fort Worth, Texas, for $310 million.
The deal will make Crescent the sole owner of CBHS; it already owns a 50% stake in the company. Included in the transaction are intellectual properties like outcomes research and the Charter brand name. The deal is expected to close in the second quarter.
CBHS will pay $280 million for the properties. Crescent will provide Magellan with $30 million in its stock.
CBHS is the nation's largest operator of psychiatric hospitals with 88 facilities in 31 states.
Magellan primarily used to operate psychiatric hospitals under the name Charter Medical Corp. Much of that began to change last year when Crescent acquired a 50% interest in Magellan's psychiatric hospitals through a joint venture (Feb. 3, 1997, p. 12).