LOUISVILLE, Ky. — Humana plans to
sell occupational health care provider Concentra for
about $1.06 billion, as the health insurer refines
its focus on providing patient care.
Louisville, Kentucky, company said Monday it will
sell Concentra to a joint venture between specialty
hospital operator Select Medical Holdings Corp. and
the private equity fund Welsh, Carson, Anderson &
Stowe XII LP. Humana will then use proceeds from the
deal to buy back stock.
The insurer bought Concentra in late 2010 for
$790 million in its first broad foray into health
care delivery in almost two decades. Concentra,
which was privately held when it was purchased,
provides occupational health, urgent care and
physical therapy services to employers across the
Humana bought the company as part of a push to
expand care to its members, but CEO Bruce Broussard
said Monday in a statement that Concentra's
operations didn't align with the insurer's strategy
"as well as we had originally anticipated."
The insurer said that primary care businesses
like doctor practices and clinics that it has
acquired since the Concentra deal are better suited
for Humana's focus.
Leerink analyst Ana Gupte said in a research note
that the Concentra business didn't fit well with
Humana's core Medicare Advantage business. She added
that the move was expected after former investment
bank executive Brian Kane became Humana's chief
financial officer last year, and the insurer's
management raised the possibility of selling
non-core business assets.
The sale is expected to close during the second
The health insurer said its 2015 profit outlook
remains set at between $8.50 and $9 per share.
Analysts are expecting $8.87 a share on average,
according to FactSet.
Shares in Humana Inc. slipped 47 cents to $182.32
in afternoon trading, while broader indexes rose