Molina Health is unloading Pathways Health for a “nominal” price just three years after it paid $200 million to acquire the mental health company in 2015.
The insurer agreed to sell Pathways Health and Community Support, which provided in-home and community-based support services for children and adults, to Atar Capital on Monday. The private investment firm promptly appointed former longtime UnitedHealthcare executive Jill Winters as CEO of the company.
Molina purchased Pathways Health from Providence Service Corp., which owns a broad portfolio of healthcare companies. At the time, the mental health provider reported annual revenues of $346 million.
But the Long Beach insurer abandoned the business not long after. During the 2017 restructuring plans, following the ouster of former CEO Mario Molina, management determined that Pathways’ future benefits, including health plan integration, “would be less than previously anticipated,” according to the company’s second-quarter earnings report.
Last year, Molina attributed $173 million in impairment losses primarily associated with Pathways Health.
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Cyrus Nikou, founder and managing partner at Atar Capital, called the acquisition an “enormous opportunity” in a “fast-growing segment of the healthcare industry.”
Molina has been in the midst of a financial comeback over the last two years, reporting net income of $202 million during the first half of 2018 after a net loss of $512 million in 2017. Earlier this month, Molina sold off its Medicaid management system for $231 million.