Humana Signs Definitive Agreement to Sell Concentra to Select Medical and Welsh Carson; EPS Guidance for 2015 Reiterated
The deal is worth approximately $1.055 billion in cash, subject to customary adjustments.
--(BUSINESS WIRE)--Mar. 23, 2015--
(NYSE: HUM) announced today that it has reached a definitive agreement to sell the stock of its wholly-owned subsidiary,
MJ Acquisition Corporation
, a joint venture between
Select Medical Holdings Corporation
(NYSE: SEM), a leading operator of specialty hospitals and outpatient rehabilitation clinics in the U.S., and Welsh, Carson,
Anderson & Stowe XII, L.P.
, a private equity fund, for approximately
in cash, subject to customary adjustments.
also reiterated its 2015 guidance for diluted earnings per common share (EPS) of
$8.50 to $9.00
Concentra is one of the nation’s largest providers of occupational health, urgent care and physical therapy services to employers and consumers across the U.S. treating over 14 percent of all work-related injuries nationwide.
acquired Concentra in
. Subsequently, the assets of certain privately-operated Community Based Outpatient Clinics were transferred into Concentra. Additionally,
has divested certain Concentra non-core assets over the past four years.
acquired Concentra as part of a series of efforts to expand convenient, affordable high-quality health care for its membership base. These efforts also included subsequent investments in primary care platforms including owned physician practices, clinics and medical services organizations (MSOs). As the company’s strategy has been refined over the past several years, the primary care platform has proven to better advance the company’s integrated care delivery model than Concentra’s focus on occupational injuries.
The decision to divest Concentra demonstrates the company’s commitment to its previously announced business portfolio review.
will continue performing its review of the alignment and return potential of businesses across the organization to ensure each supports the company’s integrated care delivery strategy and earns the appropriate return on invested capital.
“We greatly appreciate the focus on consumers and quality of health care our Concentra associates demonstrate on a daily basis,” said Bruce D. Broussard, President and Chief Executive Officer of
. “Though Concentra’s operations did not ultimately align with Humana’s strategy as well as we had originally anticipated, we believe
and Concentra have gained valuable insights into consumer behavior over the past several years that will serve us both well moving forward. We expect
will continue to invest in other primary care assets, including MSOs, as we continue to expand our integrated care delivery model.”
Concentra reported revenues for the year ended
December 31, 2014
anticipates the Concentra divestiture will be slightly dilutive to 2015 EPS excluding any one-time gain expected upon the close of the transaction.
The Concentra transaction is anticipated to close during the second quarter of 2015 subject to Hart Scott Rodino regulatory clearance and customary closing conditions.
anticipates using the net proceeds from the transaction to advance its strategic growth priorities, to fund additional share repurchases under its existing
authorization and for general corporate purposes.
Goldman, Sachs & Co.
is acting as financial advisor to
Fried, Frank, Harris, Shriver & Jacobson LLP
is acting as legal advisor to