Kindred Shareholders Approve Sale to Humana, Private Equity Firms

Shareholders of Kindred Healthcare (NYSE: KND) on Thursday approved the sale of its home health business to insurance giant Humana Inc. (NYSE: HUM) and a pair of private equity firms.

The Louisville, Ky.-based post-acute provider announced the $4.1 billion deal last December, a few months after it began its planned exit from the skilled nursing industry.

Once the deal formally closes over the summer, Humana will claim a 40% stake in Kindred at Home, which provides home health care, hospice, and community-based care services. Humana will eventually pay about $800 million for its stake, with affiliates of private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe owning the remaining 60%.


Humana, also based in Louisville, also has the right to eventually buy out its private equity partners over time.

At the end of last year, Kindred provided home health and hospice services at 608 sites. Once a major player in the skilled nursing industry, the company sold off its SNF assets in a blockbuster $700 million deal last year, citing a desire to turn “the page to the future of integrated post-acute care.”

The Humana deal faced some opposition from Kindred shareholders, with activist investor Brigade Capital Management attempting to delay the acquisition vote with a lawsuit that argued the $9-per-share price tag was too low. But a Delaware court threw out the challenge, allowing the vote to proceed.


“We are pleased that the transaction with the consortium received the broad support of our stockholders in recognition of the robust process undertaken by the board to achieve maximum value,” Kindred president and CEO Benjamin Breier said in a statement announcing the results.

The final vote was 54.7 million shares for the merger and 15.8 million shares against. About 77% of all outstanding shares were represented in the proceedings.

Kindred stock fell slightly in the wake of the news, dropping $0.15 to close at $8.90 per share. Humana shares rose $0.30 per share, reaching $287.29 at Thursday’s close.

Written by Alex Spanko

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