
Humana is buying a minority stake in Kindred, a home health company. Photo: BSIP/UIG / Getty
Health insurer Humana and two private-equity firms — TPG Capital and Welsh, Carson, Anderson & Stowe — are buying out home health giant Kindred Healthcare for $800 million. Including debt, Kindred is valued at $4.1 billion.
Why it matters: The deal, first reported by the Wall Street Journal, would combine one of the largest Medicare insurers with a company that treats a lot of seniors at home. It's also another example of the rapid consolidation in health care as companies try to gain negotiating clout and combine businesses with the hope of lowering health care costs.
Context: Kindred acquired Gentiva Health Services, a home health and hospice operator, in 2014 after protracted hostile negotiations. The companies at the time claimed the merger had "compelling strategic rationale and industrial logic," but Kindred has since been sold for parts.
Go deeper: Humana, which will get a 40% stake in Kindred, still could be an acquisition target for another health care company that wants a sizable chunk of the Medicare Advantage market.