Humana Inc. agreed to sell control of a hospice business to buyout firm Clayton Dubilier & Rice for $2.8 billion in cash.
The health insurer will divest a 60 percent stake in its Kindred at Home unit’s hospice and personal-care divisions, it said in a statement, confirming an earlier Bloomberg News report.
CD&R’s purchase values the operations at $3.4 billion including debt, according to the statement. That represents about 12 times this year’s forecast adjusted earnings before interest, income taxes, depreciation and amortization. Humana said it plans to use proceeds from the sale for debt repayment and share buybacks.
Humana inherited the hospice business when it agreed last year to acquire the stake in Kindred at Home it didn’t already own. It said at the time it only planned to keep a minority interest in the company’s hospice and community-care operations.
The divestment won’t have a material impact on 2022 earnings, Humana said. It is expected to close in the third quarter, subject to regulatory approvals, according to a statement.
Goldman Sachs Group Inc. and Barclays Plc advised Humana on the sale, while CD&R worked with Deutsche Bank AG and UBS Group AG.
