Humana is planning to divest a majority interest in Kindred at Home’s hospice and personal care divisions to private investment firm Clayton, Dubilier & Rice, the company said Thursday.
Under the agreement, Humana will divest a 60% stake in the businesses and receive cash proceeds of approximately $2.8 billion, reflecting an enterprise valuation of $3.4 billion.
“While palliative and hospice services are important components in the continuum of care that Humana offers patients, we are confident that we can deliver desired patient outcomes and improved customer experiences through partnership models rather than fully owning KAH Hospice,” Susan Diamond, chief financial officer of Humana, said in a statement.
David Causby, president and CEO of Kindred at Home’s hospice and personal care divisions, will continue to lead these businesses under the new structure.
“We are excited by the new strategic partnership structure with Humana and look forward to working closely with CD&R to pursue growth that is centered on improved access, equity and quality of care across an expanded group of patients,” Causby said.
The transaction is expected to close in the third quarter of 2022 and is subject to customary state and federal regulatory approvals. Upon closing of the transaction, the hospice and personal care divisions will be restructured into a standalone operation, Humana said.
Humana acquired the majority stake in Kindred at Home last year. It marks the second major purchase of a home care company by an insurance company. In March, UnitedHealth, through its primary care services arm Optum, bought LHC Group.
This is a developing story. Please check back for updates.
