December 21, 2017
Health insurer Humana and two private equity firms will sink $4.1 billion into Kindred Healthcare, and then divvy up the long-term care and home healthcare provider into two companies.
Humana, TPG Capital and Welsh, Carson, Anderson & Stowe will run Kindred’s home health, hospice and community care businesses as a stand-alone company. Humana will own 40% of that company, which had a price tag of $800 million. The private equity firms will own the remainder, and after three years, they have the right to require the insurer to acquire their stake. They will also take over Kindred’s long-term care hospitals and inpatient rehab facilities.
Kindred is the nation’s largest operator of post-acute facilities in home and hospice care, rehabilitation services, and long-term acute care. Its 2016 revenue totaled $7.2 billion. It operates in 45 states, serving patients in 2,475 locations.
The deal is expected to close in summer 2018. Kindred’s board of directors began considering a sale over the past year. Kindred CEO Benjamin Breier will lead the specialty hospital segment of the company as CEO. That segment generated roughly $3.8 billion in 2016. The home health business, known as Kindred at Home, will be headed up by David Causby, the current executive vice president and president.
Over the past three years, Kindred has sold off many of its long-term acute-care hospitals. It also recently divested 91 skilled-nursing facilities.
Breier doesn’t expect the deal to come up against any antitrust issues. The companies haven’t determined if there will be any layoffs after the acquisition.
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