On July the 13th, Magellan Health Inc. (NASDAQ: MGLN) announced it had entered into an agreement to acquire Senior Whole Health (SWH). SWH primarily serves the areas of New York and Massachusetts. They focus on serving high-risk populations and provide Medicaid and Medicare dual-eligible benefits to more than 22,000 members. The acquisition gives Magellan the opportunity to enter into the Massachusetts Senior Care Options program, while also expanding their footprint in New York City’s long-term care market.

Simultaneously, Magellan will leverage SWH’s proven clinic model and expertise to aid their expansion in managed long-term services and supports. Beginning on August the 1st, Magellan will begin operating specialized managed care plans for complex populations in three states, New York, Virginia and Florida.

Chairman and CEO of Magellan Health, Barry M. Smith, praised the acquisition as a way for Magellan to expand its geographical reach. “Senior Whole Health is a well-regarded, quality health plan that has served government-sponsored programs since 2004. This acquisition will enhance Magellan’s geographic reach, membership and expertise in the MLTC market, leveraging Senior Whole Health’s intimate knowledge of both the Massachusetts and New York Markets.”

CEO of Senior Whole Health, Wayne Lowell, admitted the company was excited to join Magellan. He also believes Magellan has a opportunity to lead in long-term care. “As states look to managed care organizations to help improve care and better manage costs, Magellan is uniquely positioned to lead across the long-term care space.”

The agreement will see Magellan acquire the privately held company for approximately 400 million dollars in cash, inclusive of a 10 million dollar contingent payment. Magellan intends to make the payment using the proceeds from new debt offerings. It is believed that the acquisition will close by the end of the 1st quarter of 2018. It is subject to certain state and federal regulation approvals. Magellan believes SWH will generate a full year 2017 revenue of around 1 billion dollars and segment profit of approximately 60 million.

Management intends to provide investors with further details during its upcoming second quarter earnings call, which is scheduled for July 28, 2017.