Centene has finalized a deal to sell Magellan Rx to pharmacy benefit manager Prime Therapeutics for $1.35 billion, the companies announced Monday.
Centene acquired Magellan Health last year and subsequently pledged to divest Magellan Rx and another pharmacy business, PANTHERx Rare, which Centene sold to the Vistria Group, General Atlantic and Nautic Partners in July. Centene will use the proceeds from those deals to repurchase stock and reduce debt, the company said in May.
The health insurer acquired Magellan Rx as part of its $2.2 billion purchase of Magellan Health in January. Centene also plans to sell specialty management service Magellan Specialty Health to Evolent Health for $600 million.
The transactions are part of Centene’s value-creation plan, which it unveiled last year after hedge fund Politan Capital Management invested $900 million in the insurer and demanded higher profits, divestitures and leadership changes.
"We are pleased to continue delivering on our value creation plan with the closing of this transaction, positioning us to remain focused on our core business and strategic priorities on behalf of shareholders," Centene CEO Sarah London said in a news release.
Mostafa Kamal will remain CEO of Magellan Rx and join Prime Therapeutics’ executive leadership team. Prime Therapeutics is owned by 19 Blue Cross and Blue Shield companies.
“This is a rare opportunity to bring together two highly respected organizations to create an enterprise that is greater than the sum of its parts,” Prime Therapeutics President and CEO Ken Paulus said in a news release.