Humana Inc. has agreed to sell the stock of its subsidiary Concentra Inc., one of the largest occupational health services providers.
The buyer will be MJ Acquisition Corp., a joint venture between Select Medical Holdings Corp., an operator of specialty hospitals and outpatient rehabilitation clinics in the U.S., and Welsh, Carson, Anderson & Stowe XII, L.P., a private equity fund, for approximately $1.055 billion in cash.
Concentra is one of the nation’s largest providers of occupational health, urgent care and physical therapy services to employers and consumers across the U.S. It said it treats more than 14 percent of all work-related injuries nationwide.
Through its affiliated clinicians, the company delivers occupational medicine, urgent care, primary care, physical therapy, and wellness services to workers and the general public from more than 300 medical centers in 38 states. In addition to these medical center locations, Concentra operates more than 245 worksite medical facilities.
Humana acquired Concentra in December 2010. Humana said that as it has refined its strategy over the past several years, it found that the primary care platform was the better strategy to advance the company’s integrated care delivery model than Concentra’s focus on occupational injuries.
“We greatly appreciate the focus on consumers and quality of health care our Concentra associates demonstrate on a daily basis,” said Bruce D. Broussard, president and CEO of Humana. “Though Concentra’s operations did not ultimately align with Humana’s strategy as well as we had originally anticipated, we believe Humana and Concentra have gained valuable insights into consumer behavior over the past several years that will serve us both well moving forward.”
Concentra reported $1.0 billion in revenues for the year ended Dec. 31, 2014.
The Concentra transaction is anticipated to close during the second quarter of 2015.
Humana said it expects to use the net proceeds from the transaction to advance its strategic growth priorities, to fund additional share repurchases under its existing $2 billion authorization and for general corporate purposes.
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