HEALTHCARE AT HOME:
THE  ROWAN TECHNOLOGY REPORT

Serving the home health, home care and hospice industry since 1999.

US healthcare provider Humana and private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe (WCAS) have jointly agreed to buy North Carolina-based Curo Health Services, one of the largest hospice operators in the US, serving patients at 245 locations in 22 states.

The Consortium is purchasing Curo for approximately $1.4 billion, in which Humana will have a 40 percent minority interest. The deal is expected to close in summer 2018. Following the completion, the consortium intends to merge Curo with the hospice business of Kindred. In December 2017, Humana signed a definitive agreement to acquire a 40 percent stake in Kindred at Home, the in-home care division of Kindred Healthcare, Inc. (NYSE:KND), the nation’s largest home health provider and second largest hospice operator, for around $800 million.

Humana expects to fund its portion of the transaction through the use of parent company cash and does not anticipate a material impact to earnings in 2018 from this pending transaction.

In a public statement announcing the planned acquisition, Consortium members said they partnered with the objective of investing in and building businesses that can help modernize, enhance and transform home healthcare in America. "Curo brings a highly capable management team and a tech-enabled, centralized model for hospice care that presents the opportunity for Humana and its Consortium partners to be a leader in managing the continuum of home health, palliative care and hospice in an integrated fashion, creating a positive and differentiated experience for patients and their families – as well as their care providers. This integrated model will leverage data and analytics to measure and advance evidence-based clinical outcomes for patients and seamlessly coordinate the transition from home care, to in-home palliative care, and thoughtfully into hospice, as chronically ill patients' disease burdens progress."

The Curo transaction, which is anticipated to close during the summer of 2018, is subject to customary state and federal regulatory approvals as well as other customary closing conditions.

One more in a chain of acquisitions

The Curo transaction is not conditioned upon the closing of the Consortium's separate acquisition of Kindred at Home and is expected to occur after the closing of Kindred at Home. Upon the closing of these transactions, the Consortium intends to merge Curo with the hospice business of Kindred at Home to create the country’s largest hospice operator. Meanwhile, Humana continues to have talks with Walmart about being acquired by the retail giant.

Acquisition management team

Fried Frank acted as counsel to Humana Inc. with a team including Brian T. Mangino, corporate partner Stewart A. Kagan; executive compensation & ERISA partner Adam Kaminsky; intellectual property and technology partner Amir R. Ghavi; litigation partner Peter L. Simmons; tax partner Alan S. Kaden; corporate special counsel Jose R. Morales; corporate real estate special counsel Jessica H. Mayes; litigation special counsel Justin J. Santolli; corporate associates Kendra Clark, Stacey Harlow, Adam S. Natan, and Adam J. Ross; environmental associate Mary Beth Phipps; executive compensation & ERISA associates Maggie A. Kornreich and Jaclyn I. Waters; intellectual property and technology associate Marli Sussman; and tax associate Shane C. Hoffmann.

Simpson Thacher Represents Evercore as Financial Advisor in Humana with a team including Caroline Gottschalk and Erika Tang.

Debevoise & Plimpton LLP is advising TPG Capital and Welsh, Carson, Anderson & Stowe with a team including Andrew Bab, Jennifer L. Chu, Daniel M. Abuhoff, Gary M. Friedman, Henry Lebowitz and Jeffrey E. Ross; counsel Erich O. Grosz, Stuart Hammer, Jacob W. Stahl, Charles E. Wachsstock and Erica S. Weisgerber; and associates Bill Barlow, Elizabeth Eleanor Burke, Elizabeth Costello, Zain A. Kazmi, Samuel D. Krawiecz, Matthew J. Petrozziello, Ryan T. Rafferty, Milan Udawatta, and Meredith Wren.

©2018 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Tim Rowan's Home Care Technology Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. editor@homecaretechreport.com