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Blog Exposure - Consortium of TPG Capital, WCAS, and Humana Acquire Kindred Healthcare for $4.1 Billion

Stock Monitor: Humana Post Earnings Reporting

LONDON, UK / ACCESSWIRE / December 22, 2017 / Active-Investors.com has just released a free report on Kindred Healthcare, Inc. (NYSE: KND) ("Kindred"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=KND. On December 19, 2017, the Company announced that it has entered into an agreement to be acquired by a Consortium consisting of three companies – private equity firms TPG Capital ("TPG"), Welsh, Carson, Anderson & Stowe ("WCAS") and health insurer Humana Inc. (NYSE: HUM). The all-cash deal is valued approximately $4.1 billion including debt. Register today and get access to over 1000 Free Research Reports by joining our site below:

www.active-investors.com/registration-sg

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Kindred Healthcare and Humana most recent news is on our radar and our team decided to put out a fantastic report on each company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=KND

www.active-investors.com/registration-sg/?symbol=HUM

Transaction Highlights

As per the terms of the agreement, the Consortium has agreed to pay Kindred's shareholders $9 in cash for each Kindred's share they hold. The offer price represents a 27% premium of Kindred's 90-day volume weighted average price as on December 15, 2017, the last trading day before the rumors about the possible acquisition started doing the rounds. Kindred's Board of Directors has approved the deal.

Kindred's operations include home health, hospice, and community care businesses, long-term acute care (LTAC) hospitals, inpatient rehabilitation facilities (IRF), and a contract rehabilitation services business. Post the completion of the transaction, Kindred will be split into two independent companies - Kindred at Home and Kindred Healthcare.

Kindred at Home will have the home health, hospice, and community care businesses. Humana will hold 40% stake in Kindred at Home and the remaining 60% stake will be owned by TPG and WCAS. The agreement has a provision, wherein Humana can acquire the stake of TPG and WCAS in Kindred at Home, via a put/call option in future.

Kindred's balance businesses including LTAC hospitals, IRFs, and contract rehabilitation services will be operated under Kindred Healthcare and will be fully owned by TPG and WCAS.

The transaction is expected to be completed in the summer of FY 2018 and is subject to regulatory and shareholders' approvals as well as other closing conditions.

Once the deal is complete, Benjamin A. Breier will be the CEO of the new specialty hospital Company - Kindred Healthcare, while David Causby will be the CEO of the new company - Kindred at Home.

Management Comments

Commenting on the transaction, Benjamin A. Breier, President and CEO of Kindred, said:

"We believe this agreement maximizes value for stockholders and represents a significant step forward in transforming home healthcare in America by enhancing access to care and reducing costs for people living with chronic conditions. In addition, the specialty hospital Company, Kindred Healthcare, will be uniquely positioned to care for the most medically-complex and rehab-intensive populations."

Bruce D. Broussard, President and CEO of Humana, added:

"Humana is focused on enhancing our capabilities for care in the home to prioritize patient wellness while delivering high-quality care in a low-cost setting. This transaction with Kindred underscores the successful and ongoing execution of our strategy by joining with the most geographically diverse home healthcare provider in the country."

Jeff Rhodes, Partner at TPG stated:

"We believe this transaction will provide Kindred with additional resources and focus to drive significant value for all stakeholders. We look forward to partnering with Humana, WCAS and the management team at Kindred to build on the complementary capabilities this transaction brings together."

D. Scott Mackesy, Managing Partner at WCAS, re-joined:

"We have a long history of creative deal-making with corporate partners and look forward to working with Humana, TPG, and Kindred's management team to deliver the highest quality, most cost-efficient healthcare to all."

Benefits of the deal for Humana

Kindred management has been looking to sell the Company for nearly over a year. Humana's investment in Kindred at Home is valued approximately $800 million. Business segments covered under Kindred at Home have over 40,000 caregivers who serve approximately 130,000 patients daily. These segments have annual revenue of approximately $2.5 billion. Humana expects the transaction to be slightly accretive to its diluted EPS from FY19 onwards.

For Humana, this deal is a great way of expanding its footprint in the home healthcare segment. The acquisition is in-line with Humana's strategy of providing next generation of integrated care delivery to its customers at home in a lower cost setting. The deal will especially benefit Humana's customers who suffer from chronic ailments.

The deal also expands Humana's geographic coverage as Kindred's businesses have a 65% overlap with Humana's individual Medicare Advantage membership. The deal will enable robust data sharing between Humana and Kindred which will help Humana in improving its offerings in this business segment via improved analytics and predictive modeling. These improvements will lead to increased capabilities and enable better interactions between Humana's customers and physicians resulting in improved clinical outcomes, ultimately lowering medical costs.

About Kindred Healthcare, Inc.

Louisville, Kentucky-based Kindred is a leading healthcare services Company in the US. Kindred provides various healthcare services through its subsidiaries and has a network which includes 77 long-term acute care hospitals, 19 inpatient rehabilitation hospitals, 16 sub-acute units, 609 home health, hospice and non-medical home care sites of service, 101 inpatient rehabilitation units (hospital-based), and contract rehabilitation service businesses which served 1,653 non-affiliated sites of service.

Kindred provides its services in 2,475 locations across 45 states in US and is supported by approximately 86,400 employees.

About Humana Inc.

Founded in 1961 and headquartered in Louisville, Kentucky, Humana is a leading health insurance and healthcare company committed to helping its medical and specialty members achieve their best health. The Company's efforts have helped improve the quality of life for people with Medicare, families, individuals, military service personnel, and communities.

About TPG Capital

Founded in 1992, TPG is a leading global alternative asset firm and its investments are across a wide range of asset classes, including private equity, growth venture, real estate, credit, and public equity. TPG aims to build dynamic products and options for its investors while also instituting discipline and operational excellence across the investment strategy and performance of its portfolio. It has office locations across the globe and has over $73 billion of assets under management (AUM).

About Welsh, Carson, Anderson & Stowe (WCAS)

WCAS was formed in 1979 and focuses on investing in two growth industries: healthcare and technology and technology-enabled services in the US. The Firm is currently investing an equity fund, Welsh, Carson, Anderson and Stowe XII, L.P., which closed on over $3.3 billion in commitments. WCAS has a current portfolio of approximately twenty companies with 2017 annual revenues totaling over $16 billion.

Stock Performance Snapshot

December 21, 2017 - At Thursday's closing bell, Kindred Healthcare's stock climbed 3.83%, ending the trading session at $9.50.

Volume traded for the day: 6.70 million shares, which was above the 3-month average volume of 1.65 million shares.

Stock performance in the last month – up 21.79%; previous three-month period – up 52.00%; past twelve-month period – up 18.01%; and year-to-date - up 21.02%

After yesterday's close, Kindred Healthcare's market cap was at $832.17 million.

The stock has a dividend yield of 5.05%.

The stock is part of the Healthcare sector, categorized under the Long-Term Care Facilities industry. This sector was up 0.1% at the end of the session.

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