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Health care industry

Humana Completes Sale of Concentra Inc. to Select Medical Holdings Corporation

Strategic Insights

— 1 min read

Humana Inc. has completed its previously announced sale of Concentra Inc. to MJ Acquisition Corporation, a joint venture between Select Medical Holdings Corporation and Welsh, Carson, Anderson & Stowe XII, L.P., for approximately $1.055 billion in cash. This divestiture aligns with Humana's business portfolio review, ensuring each business supports the company's integrated care delivery strategy and earns the appropriate return on invested capital. The transaction is expected to yield a one-time gain for Humana in the range of $1.35 to $1.45 per share, including a $0.35 per share tax benefit recognized in the quarter ended March 31, 2015.

Key Takeaways:

  • Humana has completed the sale of Concentra Inc. to MJ Acquisition Corporation for approximately $1.055 billion in cash.
  • The sale is a result of Humana's business portfolio review, aimed at ensuring each business supports the company's integrated care delivery strategy and earns the appropriate return on invested capital.
  • The transaction is expected to yield a one-time gain for Humana in the range of $1.35 to $1.45 per share, including a $0.35 per share tax benefit recognized in the quarter ended March 31, 2015.
  • Select Medical Holdings Corporation is a leading operator of specialty hospitals and outpatient rehabilitation clinics in the United States, operating 112 long term acute care hospitals and 17 acute medical rehabilitation hospitals in 28 states and 1,028 outpatient rehabilitation clinics in 31 states.
  • Welsh, Carson, Anderson & Stowe XII, L.P. is an equity fund managed by Welsh, Carson, Anderson & Stowe, with a current portfolio of approximately 25 companies and focuses its investment activity in two target industries, information/business services and healthcare.
  • The sale of Concentra Inc. demonstrates Humana's commitment to its business portfolio review and integrated care delivery strategy.

Statistics:

  • $1.055 billion: The amount of cash paid for the sale of Concentra Inc.
  • $1.35 to $1.45: The range of the one-time gain expected for Humana from the sale of Concentra Inc.
  • $0.35 per share: The tax benefit recognized in the quarter ended March 31, 2015.

Sources:

  • Business Wire: http://www.businesswire.com/news/home/20150601006601/en/
  • Securities and Exchange Commission (SEC) filings: Form 10-K for the year ended December 31, 2014; Form 10-Q for the period ended March 31, 2015.

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