Humana, Private Equity Firms Complete Kindred Acquisition

Insurance giant Humana (NYSE: HUM) and two private equity firms have completed their planned acquisition of Kindred Healthcare, which has ceased trading on the New York Stock Exchange as a result.

In December 2017, Humana and two PE firms—TPG Capital and Welsh, Carson, Anderson & Stowe—announced they were acquiring Kindred for $9 in cash per share of common stock, for a total of about $4.1 billion. In April, Kindred shareholders approved the sale, despite pushback from activist investor Brigade Capital, which argued that the $9 per share offer was inadequate.

Louisville-based Kindred is one of the largest providers of post-acute and senior care in the United States. Its Kindred at Home division is the single largest U.S. home health company, with more than 600 sites and about 40,000 caregivers, generating annual revenue of approximately $2.5 billion. Kindred also operates a large hospital portfolio, including 75 long-term acute care hospitals and 19 inpatient rehabilitation hospitals.

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Under terms of the deal, the hospital business is being separated from Kindred at Home. The hospital arm will be owned by the PE firms. Kindred at Home will be a standalone company, with the PE firms owning a 60% stake and Humana owning the remaining 40%. In the future, Humana has a right to buy the entire enterprise through a put/call arrangement.

Humana—like Kindred, based in Louisville—believes that by controlling more of the care continuum, it can better manage costs and outcomes for its large Medicare Advantage beneficiary population. With this in mind, the insurer and its PE partners also recently acquired Curo Health Services, one of the largest U.S. hospice providers, for about $1.4 billion.

That deal is expected to close later this month, the companies stated in Monday’s press release.

Written by Tim Mullaney

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