Magellan Health Services, Columbia, Md., said that Onex Corp. of Canada will take a controlling interest in the behavioral healthcare provider with a $200 million investment. Toronto-based Onex, one of Canada's largest companies, will make a $150 million equity investment when Magellan completes its Chapter 11 reorganization and will pay an additional $50 million to buy out claims and replace a previous equity commitment by Magellan's unsecured creditors. The healthcare company, which entered bankruptcy protection earlier this year, is expected to file a revised reorganization plan with U.S. Bankruptcy Court in New York within the next few weeks. The deal with Onex has been approved by Magellan's creditors as well as its largest customer, Aetna. In a written statement, Magellan CEO Steve Shulman called the deal "tremendous vote of confidence" and said, "Magellan will have an even stronger financial foundation when we exit Chapter 11." -- by Julie Piotrowski
Canadian firm to take dominant interest in Magellan
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