Strange Tony,
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)
I thought the key to Kindred's success was integrating a range of post acute care services. Now the key is dis-integrating? It feels like they just admitted failure of their core strategy, a we couldn't make it work so we're selling out.
ReplyDeleteHow many more shares will they award themselves before the deal closes?
And ironically, Gentiva is back to whence it came less hundreds of talented employees and a loss of $10.50 per share for any of those who hung onto their ESPP stock lieu of being slammed by taxes. How come these clowns quickly caved in at $9 as opposed to fighting for more like Gentiva did? Possible class action (to enrich more lawyers here: http://bespc.com/kindred/
ReplyDeleteAnonymous, a major shareholder is not impressed with the deal to sellout:
ReplyDeletehttps://www.sec.gov/Archives/edgar/data/1060009/000091957417008738/d7778536_ex99-1.htm
Kindred continues trading above the deal price, closing at $9.70 today. Institutions hold nearly all of Kindred's shares. They will decide to take the deal or ask for what executives couldn't or wouldn't. It's trading like a competitor bid is in the works.
ReplyDeleteHave you not learned "Kindred's Way" "You are the best thing until the next thing!"
ReplyDeleteIf Kindred had been smart, they would have gotten rid of all Gentiva management, then outsourced the billing, collections and cash posting positions. I knew Kindred was bad so as soon as we knew Kindred was taking over, I left Gentiva and warned my fellow coworkers that nothing good was going to come from that merger. Did they listen? Nope. I make more money, better benefits, better work environment. They may get a nice holiday party once a year, but big deal when your health benefits suck. I bet Humana won't make the same mistake that Kindred did... #sorrynotsorry
ReplyDeleteKindred's Board has a TPG Capital advisor, a clear conflict of interest. Here's a blast from Generic Hospice past:
ReplyDeletehttps://generichospice.blogspot.com/2015/11/earnings-call-new-board-member.html
Chilling
The man that trashed his company's vision for integrated post-acute healthcare while making two king's ransoms said:
ReplyDelete"This is not a technical business book; it's an emotional leadership survival guide," Breier explained. "It encourages readers to be connected to a mission rather than just a salary. This book will hopefully help incumbent leaders, but was written with an eye towards inspiring emerging leaders of tomorrow."
Ben Breier is a jerk who sold our once great hospice down a river. While he counted his winnings Humana and financial rapscallions destroyed our hospice, harming employees and patient care.