[July 11, 2018] |
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Humana, Together with TPG Capital and Welsh, Carson, Anderson & Stowe, Announce Completion of the Acquisition of Curo Health Services
Humana Inc. (NYSE: HUM), TPG Capital (TPG) and Welsh, Carson, Anderson &
Stowe (WCAS) (collectively, the Consortium) today announced the
completion of the previously announced acquisition of Curo Health
Services (Curo), one of the nation's leading hospice operators providing
care to patients at 245 locations in 22 states, from Thomas H. Lee
Partners.
The Consortium intends to combine Curo with the hospice business of
Kindred at Home to create the country's largest hospice operator.
Cautionary Statement
This news release includes forward-looking statements regarding Humana
within the meaning of the Private Securities Litigation Reform Act of
1995. When used in investor presentations, press releases, Securities
and Exchange Commission (SEC (News - Alert)) filings, and in oral statements made by or
with the approval of one of Humana's executive officers, the words or
phrases like "expects," "believes," "anticipates," "intends," "likely
will result," "estimates," "projects" or variations of such words and
similar expressions are intended to identify such forward-looking
statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and assumptions,
including, among other things, information set forth in the "Risk
Factors" section of the company's SEC filings, a summary of which
includes but is not limited to the following:
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If Humana does not design and price its products properly and
competitively, if the premiums Humana receives are insufficient to
cover the cost of healthcare services delivered to its members, if the
company is unable to implement clinical initiatives to provide a
better healthcare experience for its members, lower costs and
appropriately document the risk profile of its members, or if its
estimates of benefits expense are inadequate, Humana's profitability
could be materially adversely affected. Humana estimates the costs of
its benefit expense payments, and designs and prices its products
accordingly, using actuarial methods and assumptions based upon, among
other relevant factors, claim payment patterns, medical cost
inflation, and historical developments such as claim inventory levels
and claim receipt patterns. The company continually reviews estimates
of future payments relating to benefit expenses for services incurred
in the current and prior periods and makes necessary adjustments to
its reserves, including premium deficiency reserves, where
appropriate. These estimates, however, involve extensive judgment, and
have considerable inherent variability because they are extremely
sensitive to changes in claim payment patterns and medical cost
trends, so any reserves the company may establish, including premium
deficiency reserves, may be insufficient.
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If Humana fails to effectively implement its operational and strategic
initiatives, particularly its Medicare initiatives and state-based
contract strategy, the company's business may be materially adversely
affected, which is of particular importance given the concentration of
the company's revenues in these products. In addition, there can be no
assurances that the company will be successful in maintaining or
improving its Star ratings in future years.
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The divestiture of Humana's subsidiary, KMG America Corporation, is
subject to various closing conditions, including various regulatory
approvals and customary closing conditions, as well as other
uncertainties, and there can be no assurances as to whether and when
it may be completed.
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If Humana fails to properly maintain the integrity of its data, to
strategically implement new information systems, to protect Humana's
proprietary rights to its systems, or to defend against cyber-security
attacks, the company's business may be materially adversely affected.
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Humana is involved in various legal actions, or disputes that could
lead to legal actions (such as, among other things, provider contract
disputes relating to rate adjustments resulting from the Balanced
Budget and Emergency Deficit Control Act of 1985, as amended, commonly
referred to as "sequestration"; other provider contract disputes; and
qui tam litigation brought by individuals on behalf of the
government), governmental and internal investigations, and routine
internal review of business processes any of which, if resolved
unfavorably to the company, could result in substantial monetary
damages or changes in its business practices. Increased litigation and
negative publicity could also increase the company's cost of doing
business.
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As a government contractor, Humana is exposed to risks that may
materially adversely affect its business or its willingness or ability
to participate in government healthcare programs including, among
other things, loss of material government contracts, governmental
audits and investigations,potential inadequacy of government
determined payment rates, potential restrictions on profitability,
including by comparison of profitability of the company's Medicare
Advantage business to non-Medicare Advantage business, or other
changes in the governmental programs in which Humana participates.
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The Healthcare Reform Law, including The Patient Protection and
Affordable Care Act and The Healthcare and Education Reconciliation
Act of 2010, could have a material adverse effect on Humana's results
of operations, including restricting revenue, enrollment and premium
growth in certain products and market segments, restricting the
company's ability to expand into new markets, increasing the company's
medical and operating costs by, among other things, requiring a
minimum benefit ratio on insured products, lowering the company's
Medicare payment rates and increasing the company's expenses
associated with a non-deductible health insurance industry fee and
other assessments; the company's financial position, including the
company's ability to maintain the value of its goodwill; and the
company's cash flows. Additionally, potential legislative changes,
including activities to repeal or replace, in whole or in part, the
Health Care Reform Law, creates uncertainty for Humana's business, and
when, or in what form, such legislative changes may occur cannot be
predicted with certainty.
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Humana's business activities are subject to substantial government
regulation. New laws or regulations, or changes in existing laws or
regulations or their manner of application could increase the
company's cost of doing business and may adversely affect the
company's business, profitability and cash flows.
-
If Humana fails to develop and maintain satisfactory relationships
with the providers of care to its members, the company's business may
be adversely affected.
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Humana's pharmacy business is highly competitive and subjects it to
regulations in addition to those the company faces with its core
health benefits businesses.
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Changes in the prescription drug industry pricing benchmarks may
adversely affect Humana's financial performance.
-
If Humana does not continue to earn and retain purchase discounts and
volume rebates from pharmaceutical manufacturers at current levels,
Humana's gross margins may decline.
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Humana's ability to obtain funds from certain of its licensed
subsidiaries is restricted by state insurance regulations.
-
Downgrades in Humana's debt ratings, should they occur, may adversely
affect its business, results of operations, and financial condition.
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The securities and credit markets may experience volatility and
disruption, which may adversely affect Humana's business.
In making forward-looking statements, Humana is not undertaking to
address or update them in future filings or communications regarding its
business or results. In light of these risks, uncertainties, and
assumptions, the forward-looking events discussed herein may or may not
occur. There also may be other risks that the company is unable to
predict at this time. Any of these risks and uncertainties may cause
actual results to differ materially from the results discussed in the
forward-looking statements.
Humana advises investors to read the following documents as filed by the
company with the SEC for further discussion both of the risks it faces
and its historical performance:
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Form 10-K for the year ended December 31, 2017;
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Form 10-Q for the quarter ended March 31, 2018; and
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Form 8-Ks filed during 2018
About TPG
TPG is a leading global alternative asset firm founded in 1992 with
approximately $84 billion of assets under management and offices in
Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London,
Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul,
and Singapore. TPG's investment platforms are across a wide range of
asset classes, including private equity, growth venture, real estate,
credit, and public equity. TPG aims to build dynamic products and
options for its investors while also instituting discipline and
operational excellence across the investment strategy and performance of
its portfolio. For more information, visit www.tpg.com.
About Welsh, Carson, Anderson & Stowe (WCAS)
WCAS focuses its investment activity in two target industries:
technology and healthcare. Since its founding in 1979, WCAS has
organized 16 limited partnerships with total capital of over $22
billion. The Firm is currently investing an equity fund, Welsh, Carson,
Anderson and Stowe XII, L.P., which closed on over $3.3 billion in
commitments. WCAS has a current portfolio of approximately twenty
companies. WCAS's strategy is to partner with outstanding management
teams and build value for its investors through a combination of
operational improvements, internal growth initiatives and strategic
acquisitions. See www.wcas.com
to learn more.
About Humana
Humana Inc. is committed to helping our millions of medical and
specialty members achieve their best health. Our successful history in
care delivery and health plan administration is helping us create a new
kind of integrated care with the power to improve health and well-being
and lower costs. Our efforts are leading to a better quality of life for
people with Medicare, families, individuals, military service personnel,
and communities at large.
To accomplish that, we support physicians and other health care
professionals as they work to deliver the right care in the right place
for their patients, our members. Our range of clinical capabilities,
resources and tools - such as in-home care, behavioral health, pharmacy
services, data analytics and wellness solutions - combine to produce a
simplified experience that makes health care easier to navigate and more
effective.
More information regarding Humana is available to investors via the
Investor Relations page of the company's website at humana.com,
including copies of:
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Annual reports to stockholders;
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Securities and Exchange Commission filings;
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Most recent investor conference presentations;
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Quarterly earnings news releases and conference calls;
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Calendar of events; and
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Corporate Governance information.
About Curo Health Services
Curo Health Services is a hospice care provider operating 245 agencies
in 22 states. Curo is committed to clinical excellence with compassion
and dignity when life matters most. The company's mission is to honor
life and offer compassion to our patients, and their families, when
facing a life-limiting illness. For more information, follow Curo at www.curohs.com.
About Kindred at Home
Kindred at Home is primarily a home health, hospice and community care
services company with annual revenues of approximately $2.6 billion(1).
At March 31, 2018, Kindred at Home through its subsidiaries had
approximately 46,000 employees providing healthcare in 606 home health,
hospice and non-medical home care sites of service in 40 states. For
more information, go to www.kindredhealthcare.com.
You can also follow us on Twitter
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(1) Revenues for the last twelve months ended March 31, 2018.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180711005745/en/
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