WellCare Health Plans has agreed to acquire Meridian Health of Detroit for a sum of $2.5 billion. The deal, which was announced by the companies on Tuesday is expected to be completed by the end of this year. In the deal, WellCare Health Plans will purchase Meridian Health Plans of Illinois, Inc, Meridian Health Plans of Michigan Inc and the MeridianRx pharmacy benefit management company. All these are operational sections of Meridian Health of Detroit.
Meridian has grown to become one of the largest care companies
Meridian, a family-owned company established in 1997 by David Cottonand his wife Shery Cotton,has grown over the years and is currently the biggest Medicaid health plan in Michigan. It has a membership base of over 500,000 and is one of the biggest care companies managed by a family in the entire country. The company has employed many people in downtown Detroit. The company is ranked in fourth position on Crain’s Private 200 list that examines the biggest privately owned companies in Detroit.
As of May 1, Meridian has around 565,000 Medicaid members in Illinois plus 508,000 Medicaid members in Michigan. This is according to information in the joint statement released by the two companies. The company also has operations in Ohio and Indiana.
The impact of the acquisition
It is difficult to establish the impact of the transaction from the word go, especially with regards to the company’s operations in Michigan well we employment. Jon Cotton, the president of Meridian was very economical on information surrounding the deal but was quick to say that the move is in the best interest of the company, the workers and the people it serves.
On his part, Meridian CEO David Cotton said that WellCare is committed to helping its members live a dignified lifestyle, which makes the right partner. He noted that WellCare goals, values and missions resonate well with those of Meridian. David added that the WellCare is very committed to offering its members with unparalleled experience including high quality health care.
WellCare has a membership base of 4.3 million as at the first quarter of 2018. The company says that it is optimistic that the acquisition ofMeridian will help in boosting its Medicaid portfolio by injecting in new members spread out in several states. In 2017, WellCare reported $373.7 million in income and revenue of $17 billion.