Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Humana in talks to buy Kindred Healthcare with equity firms: source

Published 12/17/2017, 04:22 PM
Updated 12/17/2017, 04:30 PM
© Reuters. Humana CEO Bruce Broussard poses for a portrait in the Manhattan borough of New York City

© Reuters. Humana CEO Bruce Broussard poses for a portrait in the Manhattan borough of New York City

NEW YORK (Reuters) - U.S. health insurer Humana Inc (N:HUM) is in advanced talks to acquire acute care provider Kindred Healthcare Inc (N:KND) in partnership with private equity firms Welsh, Carson, Anderson & Stowe and TPG, a source familiar with the matter said on Sunday.

A deal would provide the latest example of the growing convergence between consumer health and insurance, following CVS Health Corp's (N:CVS) agreement earlier this month to acquire Aetna Inc (N:AET) for $69 billion.

Humana has been investing significantly in its home health capabilities, Humana At Home, which the insurer touts as a compliment to its Medicare Advantage franchise. If the negotiations are successful, a deal could come as early as this week, the source said, asking not to be identified because the matter is confidential.

The Wall Street Journal, which first reported on the talks, said the deal could value Kindred at $9 per share. On Friday, the company's stock closed at $8.60, giving it a market value of $750 million.

Welsh, Carson, Anderson & Stowe and TPG would take over Kindred's facility-focused business, which includes long-term acute care hospitals and rehabilitation centers. The private equity firms together with Humana would get Kindred's home and hospice care operations, the WSJ reported, citing sources it did not identify.

Kindred and Humana did not immediately respond to requests for comment. TPG and Welsh, Carson, Anderson & Stowe also were not immediately available for comment.

Based in Louisville, Kentucky, Kindred is the largest home healthcare provider and hospice operator in the United States.

The company, which has long-term debt of $3.2 billion, has suffered due to its reliance on the Medicare federal health insurance program for revenue. It is also at risk for changes to how post-acute care services are reimbursed if U.S. President Donald Trump restructures the healthcare system.

Earlier this year, Kindred announced plans to coordinate skilled nursing operations with Genesis HealthCare Inc (N:GEN), one of the largest operators of skilled nursing facilities in the United States.

In 2015, Kindred acquired Gentiva Health Services Inc for $1.8 billion, turning it into the biggest U.S. provider of home health and hospice care, but also saddling it with debt.

© Reuters. Humana CEO Bruce Broussard poses for a portrait in the Manhattan borough of New York City

Health insurance companies are exploring new ways to diversify their revenues with acquisitions in acute care, after federal regulators blocked two major mergers in the sector, and insurance exchanges set up under the Affordable Care Act, popularly known as Obamacare, came under pressure from Republicans.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.