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FOR IMMEDIATE RELEASE
Magellan Investor Contact: Aetna Investor Contact:
Kevin Helmintoller Catherine H. Smith
(404) 814-5742 (860)273-6184
Magellan Media Contact: Aetna Media Contact:
Robert Mead Jill B. Griffiths
(212) 445-8208 (215)775-6890
AETNA U.S. HEALTHCARE COMPLETES SALE OF
HUMAN AFFAIRS INTERNATIONAL TO MAGELLAN
Long-Term Strategic Provider Relationship Commences
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ATLANTA, GA and HARTFORD, CT, December 5, 1997 -- Magellan Health Services, Inc.
(NYSE:MGL) and Aetna Inc. (NYSE:AET) announced today the completion of the
transaction in which Magellan acquired Human Affairs International (HAI), the
behavioral health subsidiary of Aetna U.S. Healthcare. Terms of the transaction
included a payment of $122.1 million in cash by Magellan at closing. In
addition, under the terms of the strategic relationship, payments of up to $300
million may be made by Magellan over the term of the long-term strategic
relationship. HAI has become a wholly-owned subsidiary of Magellan Health
Services.
The two companies have commenced a long-term strategic provider
relationship which will provide Aetna U.S. Healthcare members with continued
access to HAI's broad network of behavioral health professionals, as well as to
Magellan's existing network of behavioral health providers across the country.
Mac Crawford, chairman, president and CEO of Magellan said, "We are
pleased to welcome Human Affairs International as one of our growing behavioral
managed care operations. The inclusion of the long-term strategic relationship
with Aetna U.S. Healthcare is
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exciting and should provide HAI with significant growth opportunities over the
term of the agreement while continuing to benefit Aetna U.S. Healthcare."
"We're pleased to develop a long-term relationship with Magellan, which
not only maintains HAI behavioral health professionals for our members, but
allows even greater access to Magellan's professionals and facilities," said
Daniel S. Messina, vice president and head of business strategies for Aetna U.S.
Healthcare.
HAI, headquartered in Salt Lake City, provides behavioral health
programs to more than 15 million covered lives, of which the majority are Aetna
U.S. Healthcare members.
Magellan Health Services, Inc. is one of the country's largest
specialty care managers. Its business units include: Majority owned Green Spring
Health Services, a leader in behavioral managed care services with nearly 20
million covered lives; Human Affairs International (HAI), one of the largest
providers of workplace assistance programs in the United States; MENTOR/Magellan
Public Solutions, serving public sector agencies with privatized behavioral
health services; Charter Advantage, an international franchisor of behavioral
health care systems; and 50% interest in Charter Behavioral Health Systems, the
largest operator of free-standing behavioral facilities in the U.S; and subject
to consummation of a previously announced purchase transaction, Merit Behavioral
Care Corporation (MBC), one of the largest providers of mental health and
substance abuse services and employee assistance programs to more than 21
million enrollees and 800 clients.
Aetna U.S. Healthcare, the health business unit of Aetna Inc., is the
nation's leading health benefits organization with a total health enrollment of
approximately 14 million members nationwide.
Certain of the statements in this press release including, without
limitation, statements by Magellan concerning HAI's growth opportunities and
amounts potentially payable under the strategic relationship constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995. Risk factors such as the ability to successfully close and integrate the
MBC transaction and to successfully integrate the HAI acquisition could prevent
Magellan from achieving the growth mentioned. Also, the amounts potentially
payable under the
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strategic relationship are contingent upon a number of factors and no assurances
can be made that the payments will be made or received by the respective
parties. For a more complete discussion of these and other risk factors, please
see Magellan's Quarterly Report on Form 10-Q for the third fiscal quarter ended
June 30, 1997 filed with the Securities and Exchange Commission on August 14,
1997 and Exhibit 99 contained in Magellan's Annual Report on Form 10-K, as
amended for the fiscal year ended September 30, 1996 filed with the Securities
and Exchange Commission.