WellCare Health is set to acquire Meridian Health Plans for $2.5bn
WellCare Health Inc is set to acquire Meridian Health Plan (Michigan), Inc., Meridian Health Plan (Illinois), and MeridianRx, a pharmacy benefit manager (PBM), collectively known as Meridian for $2.5bn in cash. The transaction is expected to close by the end of 2018.
One of the largest, privately held and for profit managed care organisations in the US, Meridian expects to generate more than $4.3bn in total revenue in 2018. As a result of this transaction, WellCare will diversify its Medicaid portfolio through the addition of Michigan, where Meridian has the No. 1 Medicaid market position; deepen its Medicaid business in Illinois; and acquire an integrated PBM platform.
Serving approximately 1.1mn Medicaid, Medicare Advantage (MA), integrated dual-eligible and Health Insurance Marketplace members in Michigan, Illinois, Indiana and Ohio, Meridian has achieved high quality ratings from the National Committee for Quality Assurance (NCQA) for its Medicaid health plans.
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"WellCare and Meridian share a similar commitment to serving our members through a comprehensive, integrated approach to healthcare," explained Ken Burdick, WellCare's CEO.
"This transaction strategically aligns with our focus on government-sponsored health plans, will strengthen our capabilities and growing business, and will meaningfully advance our growth agenda."
Meridian has approximately 508,000 Medicaid members in Michigan and 565,000 Medicaid members in Illinois. Upon closing, WellCare will have the No. 1 Medicaid membership market share in Michigan and Illinois, increasing its leading market position from four to six states. WellCare will also expand its MA business through the addition of Meridian's 27,000 MA members in Michigan, Illinois, Indiana and Ohio.
In addition, as a result of this transaction, the company will add an integrated PBM platform that provides a wide range of services and product offerings to both Meridian's members and third parties.
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