Saturday, May 13, 2017

Pray LBO Stays Away


Strange Tony,

Financial sharks circle Kindred Healthcare and some are inside the company.  Take former CEO Paul Diaz, who received a $6 million cash bonus in May 2015 for closing the deal on Gentiva.  Diaz went on to become an operating partner with Cressey and Company.  Oddly, his bio on Cressey's website makes no mention of his current Kindred board service.  Diaz is Vice Chairman of Kindred's Board of Directors. 

Should Kindred sell for a premium to Cressey and Company conflict of interest questions would arise.  Should Cressey hire Guidon Partners to co-invest on Kindred more ethical questions would surface.  A Generic Hospice commenter educated me about Diaz role with Cressey and Guidon. How many ways could Paul Diaz make money if those possibilities rang true?  He'd be on both sides of the deal.

Members of Kindred's executive team and board have leveraged buyout organizations, LBO, in their background. Firms include Warburg Pincus, Bain Capital, TPG, Summit Partners, Blackstone Group, Apollo Global Management and the aforementioned Cressey and Company.

Reuters cited two LBO firms as being interested, Blackstone and Apollo Global.  Kindred COO Kent Wallace worked as CEO for Blackstone affiliate, Vanguard Health Systems.  Kindred Board member Frederick Kleisner served on the board of an Apollo affiliate, Apollo Residential Mortgage..

Kindred's management operated much like a buyout firm by purchasing companies with copious amounts of debt.  The Gentiva buyout bought our hospice into Kindred's wider post acute tent, which it now wants to shrink or exit.  The company's obsession with measures and money have been to the detriment of mission and competent management practices at our site.  Mostly stagnant pay and deteriorating benefits have been another part of the Kindred employee experience.

Please let our new owner not be the Hannibal Lechter of finance, LBO or better known by its modern name - private equity.  Lord keep us safe from corporate predators.  For that I pray.

Anonymous (from Kindred-ever-enriching-executives)

1 comment:

  1. Gentiva struggled with hospice since they first took it on and there was worry it wasn't going to last before Kindred came along. Either get rid of the crappy management or sell it off.

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