WellCare Health Plans Inc. in Tampa today announced it has entered into a definitive agreement to acquire Meridian Health Plan of Michigan Inc., Meridian Health Plan of Illinois Inc., and Meridian Rx, a pharmacy benefit manager, for $2.5 billion in cash. The transaction is expected to close by the end of 2018.
“Meridian is a well-performing health plan, and WellCare and Meridian share a similar commitment to serving our members through a comprehensive, integrated approach to health care,” says Ken Burdick, CEO of WellCare. “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 is one of the largest privately held, for-profit managed care organizations in the United States and serves about 1.1 million members as of May 1 in Michigan, Illinois, Indiana, and Ohio. The company expects to generate more than $4.3 billion in total revenue in 2018. WellCare will diversify its Medicaid portfolio through the addition of Michigan, where Meridian has the No. 1 Medicaid market position.
“WellCare’s unwavering commitment to improving the lives of its members makes it an ideal partner,” says David B. Cotton, CEO of Meridian. “Our similar missions, values, and goals, combined with WellCare’s dedication to providing an unparalleled member experience, including access to high-quality health care, were key factors in our decision.”
Upon closing, WellCare will have the No. 1 Medicaid membership market share in Michigan and Illinois, increasing its leading market position to six states.