Humana (HUM) To Take Over Enclara For Enriched Healthcare

Humana Inc. (NYSE:HUM) recently entered into a definitive agreement to purchase the privately held Enclara Healthcare (Enclara), a leading hospice pharmacy and benefit management provider, from Consonance Capital Partners and Enclara management. Expected to close in the first half of 2020, the deal will likely have an immaterial impact on 2020 earnings. However, financial terms of the transaction were not disclosed.

A Few Details About Enclara

Enclara, one of the nation’s largest hospice pharmacy and benefit management providers, aims at easing care delivery for patients resorting to complex care. It serves more than 450 hospice providers and 97,000 hospice patients daily. The transaction includes the acquisition of Enclara Pharmacia, GuidantRx and Avanti Health Care Services and is subject to certain closing conditions.

Rationale Behind the Deal

With this strategic move, Humana would be able to enhance its wide-ranging care package to serve pharmacy-based requirements associated with hospice care. Additionally, the company would also be able to simplify the mail order pharmacy experience and upgrade its technology stack for in-house pharmacy via better mobile medication management and electronic medical record (EMR) connectivity.

Humana looks forward to utilizing Enclara’s clinical management expertise and its trusted relationship with customers that it has built over the past 20 years. The move is in line with its commitment to provide enriched healthcare to individuals.

Moreover, the deal would allow it to boost its PBM game, which is necessary as other insurers are also putting in concentrated efforts to solidify their presence in the pharmacy benefit management space. For example, Anthem, Inc. (NYSE:ANTM) launched its own PBM, IngenioRx.

Other Significant Acquisitions

Acquisitions have always been the company’s major growth trajectory. Some most significant ones are the purchase of Family Physicians Group, Your Home Advantage, Curo and a share in Kindred at Home, which helped the company deepen its toes in the home health and hospice market. These tactical initiatives paved way for the company’s growth.

Zacks Rank and Share Price Movement

Shares of this Zacks Rank #3 (Hold) company have gained 25.3% in a year's time, outperforming its industry’s growth of 12.3%.

Stocks to Consider

Investors interested in the medical sector might consider some better-ranked stocks like Select Medical Holdings Corporation (NYSE:SEM) and WellCare Health Plans, Inc. (NYSE:WCG) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Select Medical Holdings operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics and occupational health centers. In the trailing four quarters, the company’s average beat was 11.07%. The stock sports a Zacks Rank #1.

WellCare Health offers managed care services to government-sponsored health care programs. The company pulled off average positive surprise of 17.32% in the preceding four quarters. It carries a Zacks Rank #2 (Buy).

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