Kindred Healthcare To Be Acquired By Humana, Private-equity Firms For $4.1 Bln

(RTTNews) - Kindred Healthcare Inc. (KND) said that it agreed to be acquired by a consortium, which consists of TPG Capital; Welsh, Carson, Anderson & Stowe; and Humana Inc. (HUM), for about $4.1 billion in cash including the assumption or repayment of net debt.

As per the terms of the agreement, Kindred stockholders will receive $9.00 in cash for each share of Kindred common stock they hold, representing a premium of about 27 percent to Kindred's 90-day volume weighted average price ("VWAP") for the period ending December 15, 2017, the last trading day prior to media reports regarding the potential transaction.

Immediately following the acquisition of Kindred, the home health, hospice and community care businesses will be separated from Kindred and operated as a standalone company owned 40 percent by Humana, with the remaining 60 percent owned by TPG and WCAS. Humana will have a right to buy the remaining ownership interest in Kindred at Home over time through a put/call arrangement. Kindred's LTAC hospitals, IRFs and contract rehabilitation services businesses will be operated as a separate specialty hospital company owned by TPG and WCAS.

Upon completing the transaction, Benjamin Breier, President and Chief Executive Officer of Kindred will serve as Chief Executive Officer of the specialty hospital company, Kindred Healthcare. David Causby, currently Executive Vice President and President of Kindred at Home, will serve as Chief Executive Officer of Kindred at Home.

Under a shared services agreement, Kindred Healthcare will continue to provide certain support functions to Kindred at Home for a transitional period.

The transaction is expected to close during the summer of 2018.

Separately, Humana said it agreed to acquire a 40 percent minority interest in the Kindred at Home Division of Kindred Healthcare, Inc., for estimated cash consideration of approximately $800 million, including Humana's share of transaction and related expenses to facilitate a complete separation from the Long Term Acute Care and Rehabilitation businesses. The transaction and related expenses include, among other costs, bond breakage fees, the extinguishment of certain legacy liabilities, the acceleration of certain stock awards, and advisory fees and expenses. The implied enterprise value of Kindred at Home is $3.15 billion before these expenses.