Prime Therapeutics LLC entered into a definitive agreement to acquire Magellan Rx Management, Inc. from Magellan Health, Inc. for approximately $1.35 billion.

Prime Therapeutics LLC entered into a definitive agreement to acquire Magellan Rx Management, Inc. from Magellan Health, Inc. for approximately $1.35 billion on May 3, 2022. The consideration is subject to customary purchase price adjustments. Magellan Rx will operate as a stand-alone business unit under Prime post deal completion.

The transaction is subject to U.S. federal antitrust clearance, receipt of applicable regulatory approvals and satisfaction of other customary closing conditions and is expected to close in the fourth quarter of 2022. Prime Therapeutics' proposed acquisition of rival PBM Magellan Rx Management "raises serious anti-competitive concerns" and should be blocked, according to a letter sent from American Pharmacy Cooperative, Inc. (APCI) to the U.S. Department of Justice and the Federal Trade Commission. Centene intends to use the majority of the net proceeds from the deal to repurchase stock and the balance to reduce debt.

The transaction is expected to be neutral to slightly accretive to Centene's Adjusted Earnings Per Share in the 12-month period post-closing. Solomon Partners is serving as exclusive financial advisor and placement agent to Prime and McDermott Will & Emery and Fox Rothschild LLP are serving as legal advisor. Allen & Company LLC and Evercore are serving as financial advisors to Centene and Jeremy D London, Clifford H Aronson, Elena M Coyle, Jose A Esteves, Page W Griffin, Peter Mair, Paul T Schnell, Erica Schohn, Kenneth B Schwartz and Gavin A White of Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor.