Humana and Private-Equity Firms in Talks to Buy Kindred Healthcare

12/17/17 02:45 PM EST
By Anna Wilde Mathews, Dana Mattioli and Dana Cimilluca 

Humana Inc. is in advanced talks to join with two private-equity firms in a deal to acquire home-care provider Kindred Healthcare Inc., a move that would add to a cascade of transactions aiming to bring together insurance operations with other health-care businesses.

As part of the complex deal, Kindred, a sprawling company with $7.2 billion in revenue last year, is to be divided, according to people familiar with the matter. Welsh, Carson, Anderson & Stowe and TPG would take over Kindred's facility-focused business, which includes long-term acute-care hospitals and rehabilitation centers, while the private-equity firms together with Humana would get its home- and hospice-care operation.

The deal would value Kindred at $9 a share, the people said, a modest premium to where the shares currently trade after rallying sharply in recent weeks. Kindred stock closed Friday at $8.60, giving the debt-laden company a market value of about $750 million. Factoring in debt, Kindred has a so-called enterprise value of about $4 billion.

Though a deal could be announced soon, it's still possible the talks could fall apart.

Kindred is the biggest home-health and hospice operator in the U.S. Its facilities business, meanwhile, includes around 77 long-term care hospitals and 19 rehabilitation hospitals.

Laura Cooper contributed to this article.

Write to Anna Wilde Mathews at anna.mathews@wsj.com, Dana Mattioli at dana.mattioli@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

 

(END) Dow Jones Newswires

December 17, 2017 14:45 ET (19:45 GMT)

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