Kindred CEO Ben Breier tried selling his deal with Humana and two private equity firms as beneficial to stockholders. Buy and hold shareholders did not make out well with the $9 cash per share as most paid far more than that to purchase Kindred stock.
Two private equity firms are part of the consortium taking out Kindred.
Kindred at Home, our home health, hospice and community care business, will become a standalone company owned 40 percent by Humana, with the remaining 60 percent owned by TPG and WCAS. David Causby will be the CEO of Kindred at Home.
Ironically, Kindred acted like a publicly traded, private equity firm the last few years with its series of debt funded deals, buying Gentiva and Centerre. Private equity firms like to buy low and sell high. Kindred did the opposite, getting virtually nothing for its nursing home division and losing on Gentiva.
I expect employees to not do well either per this internal company communication.
Q. Will my salary or pay rate change?
A. We do not anticipate changes to base salaries or pay rates following the close of the transaction.
The communication said nothing of executive change in control payments, which will likely use up a chunk of Kindred's $250 million in cash, as estimated by Moody's. Executive change in control payments were as follows at the end of 2016.
CEO Ben Breier -- $13.9 million
CFO Stephen Farber -- $5.5 million
COO Kent Wallace -- $5.3 million
KAH President David Causby -- $4.7 million
Corporate Counsel Joseph Landenwich -- $3.1 million
They are likely higher today than the numbers above. an estimated total of $32 million.
The deal is expected to close in summer of 2018. I understand executive excitement over the sale as it will once again handsomely reward a select handful at the top, a group that failed to deliver on promises and ended up selling out.
An integrated Kindred is breaking down, much like its publicly traded stock price. How mendacious are leaders who flip their strategic position on a dime to enrich themselves?
Anonymous (from disintegrating Kindred)