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Humana Inc.'s $1 billion sale of occupational health and physical therapy unit Concentra Inc. apparently marks the health care insurer's exit from the workers compensation field.
The company this week announced that it will sell Concentra for $1.06 billion to M.J. Acquisition Corp., a joint venture of Mechanicsburg, Pennsylvania-based Select Medical Holdings Corp., which operates specialty hospitals and outpatient rehabilitation clinics, and New York-based private equity firm Welsh, Carson, Anderson & Stowe.
When the sale is completed, which the parties said is expected in the second quarter, Select Medical is to own 50.1% and Welsh Carson is to own 49.9% of Concentra, which operates more than 300 medical centers in 38 states, Select Medical said in a statement.
Neither company responded to requests for comment on their future plans for Concentra.
Ana Gupte, New York-based managing director and senior analyst at health care investment banking firm Leerink Swann & Co., said the decision to sell Concentra was not a financial one; rather, it was about “strategic alignment.”
While Humana has not announced its intent to sell any other assets, that could “eventually” be the case, Ms. Gupte said.
Concentra, which Humana acquired in 2010 for $790 million, had 2014 revenue of about $1 billion, Peter Costa, Boston-based senior analyst at Wells Fargo Securities L.L.C., said in a statement.
In an email, a Humana spokesman said the company has “an integrated care delivery model, and this divestiture represents the evolution of the channels through which we deliver that care.”
“We expect to continue our broader focus on wellness and population health, not the provision of occupational injuries care,” the spokesman said.
(Reuters) — U.S. health insurer Humana Inc. reported a lower than expected fourth-quarter profit as it spent more on new hepatitis C treatments and flu season expenses increased, but it said those and other costs are behind it and predicted a better 2015.