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Magellan Health Services to Acquire Partners Rx

September 9, 2013

AVON, Conn., Sep 09, 2013-- Magellan Health Services Inc. today announced that it has entered into an agreement to acquire Partners Rx(R) , a privately held, full-service commercial pharmacy benefits management company (PBM) with a strong focus on health plans and self-funded employers, sold primarily through third party administrators (TPAs) , consultants and brokers. The company has more than 300,000 core commercial PBM covered lives and anticipated 2013 revenue of approximately $240 million. The consideration of $100 million will be paid by Magellan from existing cash on hand. Certain principal owners of Partners Rx have subscribed, conditioned upon closing of the transaction, to purchase a total of $10 million in Magellan restricted common stock, which will be subject to vesting over a three-year period. Closing of the transaction is expected in the fourth quarter of 2013 and is subject to the expiration of the Hart-Scott-Rodino Antitrust Act waiting period and other customary closing conditions.

Headquartered in Scottsdale, AZ, Partners Rx was founded in 2001 and, with its established track record of success, will become the center of excellence in the commercial PBM marketplace as part of Magellan Pharmacy Solutions, continuing to serve existing and new customers, as well as bringing its unique expertise to Magellan's other pharmacy lines. Additionally, upon closing of the transaction, Robert W. Field, in addition to being President and CEO of Partners Rx, will assume additional responsibilities as CEO of Magellan Pharmacy Solutions and will be responsible for all of the company's pharmacy product lines. Mark V. Mertel, currently Chairman of Partners Rx, will become Executive Chairman of Partners Rx.

"Partners Rx is a well-respected PBM with a national presence and a growing book of business," said Barry M. Smith, Magellan's CEO. "With this acquisition, Magellan is enhancing our full-service PBM capabilities, adding scale, relationships and expertise, further complementing our unique medical pharmacy and specialty pharmacy capabilities. Our intention is to expand our footprint in the pharmacy marketplace and to bring competition where there is very little currently. I'm also pleased that Bob Field has agreed to become the CEO of Magellan Pharmacy Solutions. He's a talented and experienced leader who, with our existing executive team, will help us transform and expand our business. "

"The Partners Rx team is enthusiastic about joining Magellan, which will play a leading role as the pharmacy marketplace undergoes dramatic changes," said Robert W. Field, Partners Rx president and CEO. "Magellan has been a market innovator in the specialty drug segment and also has a long history and excellent reputation in the Medicaid space. I am excited by the opportunity to meld Partners Rx's team and its strengths with the talented Magellan team to innovate and enhance Magellan's pharmacy product lines."

"We founded Partners Rx on the basic principle of true partnership with our clients and doing the right thing all the time," said Mark V. Mertel Partners Rx's Executive Chairman. "I am very excited about the new opportunities that this merger will produce and how it will expand our products and services. Yet, the most exciting aspect of this merger is that the cultures of our companies are a perfect match. We both believe the client comes first and we both have great entrepreneurial spirits. We also believe that our cultural fit will enable us to grow Partners Rx into a major competitive force in the prescription drug management market in the very near future."

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