Samantha Caldwell McShane is a Master of Mergers

Samantha Caldwell McShane explains the legal obstacles and successes in managing Health Net’s sale to Centene

When Health Net merged with Centene in March of 2016, the new company became the largest Medicaid managed care organization in the country, with more than ten million members across a range of health insurance products. The $6.3 billion merger wasn’t the first for Health Net VP and deputy general counsel Samantha Caldwell, who has had a long career in mergers and acquisitions, but it was by far the biggest.

After graduating from the University of Virginia School of Law, Caldwell worked as an associate at Skadden, Arps, Slate, Meagher & Flom LLP before going in-house with Health Net in 2007. In addition to overseeing SEC and NYSE compliance at Health Net, she advised the board and senior executives on corporate governance, executive compensation and benefits, and supported board and committee initiatives as assistant secretary. She had responsibility for legal support of corporate finance transactions as well as mergers and acquisitions, and helped negotiate a $500 million divestiture of the company’s northeast division in 2009.

“I was looking for a broad range of experience when I was at the private firm,” she says of her early career goals. “I wanted to be involved in transactional work, and the more exposure to that the better. At Skadden, I had the opportunity to work with incredibly talented attorneys who involved me in some very complex transactions. It was a great training ground, and it was always exciting work.”

However, the greatest excitement was yet to come. Health Net began evaluating strategic alternatives in 2013, and supporting the strategic process became something of a second full-time job for Caldwell, on top of her customary day-to-day responsibilities. Her team was in the thick of the process, from the negotiation of the initial nondisclosure agreements all the way through closing the deal. Caldwell and her team played an integral role, advising on important issues relating to deal structure, securities laws, employee matters, compensation and benefits, data privacy, and corporate governance.

“As you can imagine, those days were incredibly long, but it was very rewarding to partner with the business on such a transformative deal,” she says.

Caldwell was part of a core deal team of Health Net attorneys dedicated to the transaction, led by the general counsel. “It took a village to get us over the finish line,” she says. “The teamwork and commitment demonstrated by all of my colleagues throughout this transaction, in legal and across the company, is reflective of our culture. It was a privilege to work alongside such an incredible team.”

“We were set up to hit the ground running from day one, and it’s been a thrilling accomplishment. . . . Now we’re all excited about the future.”

After the transaction closed, Caldwell helped ensure a smooth and sustainable transition for the legal departments of the two organizations. The companies were proactive; in addition to an enterprise-wide change management team, the legal departments of the two organizations collaborated closely to develop a blueprint for how the two teams would work together most efficiently and effectively. That kind of harmonizing is no short order with two large organizations, each with its particular history, business model, and culture.

“Separately, we were two very large, highly sophisticated organizations, so when you brought those two groups together, of course there were some differences,” she says. “But we found that we had a lot of similarities. The legal department at legacy Centene was a lot like legal at Health Net: filled with dedicated and hardworking people with deep subject matter expertise. That positioned us well to begin the process of working together on a daily basis.”

While many things have changed, others have not. Even prior to the transaction, the attorneys of the two companies were spread out geographically, and they have continued to work from those same locations post-merger. Caldwell worked out of Los Angeles, while the Centene general counsel has his office in St. Louis.

For Caldwell, the merger meant that she now reported to Centene’s general counsel; the span and complexity of the operations supported by the combined legal team increased dramatically. Following the merger, helping to manage the legal department’s growth and executing integration plans continued to be a focus for Caldwell, posing its own challenges.

“I worked on some challenging transactions during my time at the private firm,” she says. “But it’s a very different perspective from the in-house side, particularly with respect to the ongoing integration. The time commitment has probably been one of the more challenging aspects, finding enough hours in the day to make sure that everything is running smoothly.”

All that hard work setting the stage for the integration has paid off. “I think we have made great momentum in how the two legal departments are working together,” she says. “We were set up to hit the ground running from day one, and it’s been thrilling to see the group come together as a cohesive new team. We celebrated the culmination of some very hard work to get the transaction closed, and now we’re excited about the future.”

McShane may have worked nearly around the clock, but her efforts have not gone unnoticed, particularly from Jim Beaubien, partner at Latham & Watkins.

“Samantha is known for first-rate legal skills and a clarity of approach that has helped guide the company for several years,” Beaubien says. “She is a key legal and policy advisor who incorporates business savvy and a consumer focus in all aspects of her work, serving as both model and inspiration for colleagues and outside lawyers. It is always a great experience to work with Samantha and her team.”

Editor’s Note: At press time, McShane was no longer with Health Net.