Onex Partners, the private equity fund sponsored by Canadian conglomerate Onex Corporation, has made its first deal since holding a $1 billion first close in December, taking a 24 percent stake in Magellan Health Services Inc, a US healthcare group.
Onex Partners, which is backed by a $400 million cornerstone commitment from Onex and which hopes to close commitments totalling $1.6 billion later this year, has agreed to pay $101 million for the minority stake in Magellan. The deal sees the heavily indebted Magellan emerge from bankruptcy with a $600 million reduction of its debt, in addition to $150m of fresh capital from Onex and Magellan’s creditors.
The investment from Onex Partners was part of a financial reorganisation plan of Magellan approved by the bankruptcy court after the company filed for Chapter 11 bankruptcy protection last March. Magellan's equity is expected to resume trading on the Nasdaq stock exchange later today.
Magellan Health Services is a behavioural managed healthcare organisation serving US health plans, corporations and government agencies. “Magellan represents an outstanding platform in the healthcare industry for Onex,” said Robert Le Blanc, a managing director at Onex Partners. “We look forward to working in partnership with Magellan's management team to grow the business and build value for all shareholders.”
Onex is one of Canada's largest companies with global operations in service, manufacturing and technology industries. Its subsidiaries include Celestica, Loews Cineplex Entertainment, ClientLogic Corporation, Dura Automotive Systems, JL French Automotive Castings, Bostrom Holding and InsLogic Corporation.