One of the largest healthcare insurance companies in the United States is taking complete ownership of one of the largest home health providers. Humana Inc. (NYSE: HUM) has acquired the remaining 60% stake in Kindred at Home that it did not own from both TPG Capital and Welsh, Carson, Anderson & Stowe (WCAS). The 60% stake, including debt, is valued at $5.7 billion, giving Kindred at Home a total equity value of $8.1 billion, but the pricing is a little more complicated than, at least according to Humana.
Kindred at Home (KAH) employs approximately 43,000 caregivers providing home health, hospice, and community care services to over 550,000 patients annually. The company has locations in 40 states, providing extensive geographic coverage with approximately 65 percent overlap with Humana’s individual Medicare Advantage membership.
In 2017, Human, TPG, and WCAS teamed up to purchase Kindred Healthcare, Inc. for $4.1 billion, as seen in the search results in our Healthcare Deals Database. The deal closed in 2018. Under the terms of the deal, Kindred’s home health, hospice, and community care businesses were separated from Kindred and operated as a stand-alone company owned 40% by Humana and 60% by TPG and WCAS. The plan all along was for Humana to buy the remaining 60% at some point.
As part of the transaction, Kindred at Home’s home health operations will be integrated into Humana’s Home Solutions business, Centerwell. The acquisition is expected to close in Q3:21. Goldman Sachs & Co. LLC is acting as financial advisor to Humana. Fried, Frank, Harris, Shriver & Jacobson LLP and Manatt, Phelps & Phillips LLP are acting as legal advisors to Humana. Barclays and Guggenheim Securities, LLC are acting as financial advisors to Kindred at Home. Debevoise & Plimpton and Mintz are acting as legal advisors to Kindred at Home.