EXHIBIT 99.1
[Magellan Health Services logo] NEWS RELEASE
55 Nod Road
Avon, CT 06001
www.MagellanHealth.com
FOR IMMEDIATE RELEASE
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Investor Contact: Melissa Rose
877-645-6464
Media Contact: Erin Somers
410-953-2405
MAGELLAN HEALTH SERVICES COMPLETES ACQUISITION
OF NATIONAL IMAGING ASSOCIATES, INC.
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AVON, Conn. - January 31, 2006 - Magellan Health Services, Inc. (Nasdaq:MGLN)
today announced that it has completed its acquisition of National Imaging
Associates, Inc. (NIA), a privately held radiology benefits management (RBM)
firm headquartered in Hackensack, N.J. The Company paid approximately $122
million, after giving effect to cash acquired in the transaction, for NIA, which
becomes a wholly owned subsidiary of Magellan. The Company also confirmed its
expectation, as previously announced, that the NIA business would contribute
approximately one million dollars of net income, or $0.02 of earnings per share
on a fully diluted basis, and $13 million of segment profit to Magellan's
results in the remainder of 2006.
Steven J. Shulman, chairman and chief executive officer of Magellan, said, "With
the acquisition of NIA, Magellan has taken a bold step toward realizing its
strategic vision as a leader in the specialty health care niche. Radiology
benefits management addresses a top priority for health care purchasers and
offers significant growth opportunity for Magellan. We look forward to
leveraging our existing customer base, financial strength and operational
infrastructure to support NIA's entry into risk-based business as a platform for
future growth."
NIA manages diagnostic imaging services on a non-risk basis for its customers,
which include some of the nation's largest health plans, to ensure that such
services are clinically appropriate and cost effective. With more than 17
million lives under contract, it manages more lives than any other radiology
benefits management firm in the country.
About Magellan: Headquartered in Avon, Conn., Magellan Health Services, Inc.
(Nasdaq:MGLN) is a leading specialty health care management organization. Its
customers include health plans, corporations and government agencies.
Cautionary Statement: Certain of the statements made in this press release
including, without limitation, statements regarding the effects of the
contemplated acquisition by Magellan of NIA, estimates of future financial
performance, including revenue, segment profit and earnings per share,
expectations concerning future growth and other matters constitute
forward-looking statements contemplated under the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on management's
current expectations and are subject to known and unknown uncertainties and
risks which could cause actual results to differ materially from those
contemplated or implied by such forward-looking statements, including (among
others) risk concerning the possible election of certain of the Company's health
plan customers to manage the behavioral health care services of their members
directly; renegotiation of rates paid to and/or by the Company by customers
MAGELLAN HEALTH SERVICES COMPLETES ACQUISITION OF NATIONAL IMAGING ASSOCIATES,
INC. PAGE 2
and/or to providers; higher utilization of behavioral health treatment services
by members; delays, higher costs or inability to implement the Company's
initiatives; termination or non-renewal of contracts by customers; the impact of
new or amended laws or regulations; governmental inquiries and/or litigation;
the impact of increased competition on ability to maintain or obtain contracts;
the impact of increased competition on rates paid to or by the Company; and
other factors. Any forward-looking statements made in this document are
qualified in their entirety by the more complete discussion of risks set forth
in the section entitled "Cautionary Statements" in Magellan's Annual Report on
Form 10-K for the year ended December 31, 2004 and in the section entitled
"Forward-Looking Statements" in Magellan's Form 10-Q for the quarter ended
September 30, 2005 and the section entitled "Risk Factors" in the prospectus and
prospectus supplement filed with the Securities and Exchange Commission in
connection with the November 2005 secondary offering of Magellan common stock by
certain shareholders, each as filed with the Securities and Exchange Commission
and posted on the Company's Web site. Segment profit information referred to in
this press release may be considered a non-GAAP financial measure. Further
information regarding this measure, including the reasons management considers
this information useful to investors, is included in Magellan's Annual Report on
Form 10-K for the year ended December 31, 2004 and in Magellan's Form 10-Q for
the quarter ended September 30, 2005.
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