Strange Tony,
The winning financial rapscallion for a 60% stake of Kindred Hospice/Community Care is Clayton, Dubilier and Rice (CDR). Humana will get $2.8 billion in the deal. The press release said the whole deal was valued at $3.4 billion. That makes no sense.
A 60% stake for $2.8 billion translates to a $4.67 billion valuation for the whole company. The difference between $4.67 billion and $3.4 billion is likely debt, which has to be refinanced at today's higher interest rates.
Humana paid 11.5 times EBITDA for the rest of Kindred at Home in August 2021. That deal valued the company at $8.1 billion. Historically hospice has accounted for roughly half the revenue and half of the company's EBITDA.
Humana is selling the hospice and community care divisions for a 12x adjusted EBITDA figure. That means Humana will make money on the sale. What's a few millions amongst greedy executives.
Not taking Kindred Hospice public means President David Causby's series of king's ransom paydays remain a secret. CDR is excited to partner with Causby and the executive team.
The rest of Kindred Hospice is an expense to be controlled. Executive pay is allowed to soar. Your's is not. More pain lies ahead.
Anonymous
"CD&R’s purchase values the operations at $3.4 billion including debt, according to the statement. That represents about 12 times this year’s forecast adjusted earnings before interest, income taxes, depreciation and amortization."
ReplyDeleteThe financial arrangements still make no sense. The public will remain uninformed as this is a private deal. Maybe, something will show up in a future Humana SEC filing.
Hospice is roughly half of KAH's $3 billion in revenue and half of EBITDA, some $635 million as told to Wall Street analysts.
That's $1.5 billion in hospice revenue and over $300 million in EBITDA. Add community care and adjusted EBITDA could be higher.
Humana and CDR want there not to be a clear picture of the deal. I bet Wall Street analysts will wipe the smoke and mirrors from the press release in HUM next earnings call. Moody's may clear the air some as well.
Today Humana's CFO admitted their original buyout of KAH was on the cheap.
ReplyDelete"our purchase of the broader Kindred at Home platform, we have been able to achieve our objective to substantively increase our footprint in home care by acquiring one of the leading home health platforms in the country at an attractive valuation for our shareholders."
Kindred Hospice Nurse said "Priority is money"
ReplyDeletePros
Local management is wonderful and actually cares about staff
Cons
Unfortunately this is a greedy corporation. Despite being chronically understaffed, the priority is admitting as many people as possible Even if it means drowning field staff. Salaried nurses are expected to work over time with no compensation. If local management had enough say so, this wouldn’t be the case. It’s upper, corporate management that rules the roost and makes this company impossible to work for
NY Mag ran a story on private equity's takeover of the U.S. Air Ambulance industry. It rings alarms.
ReplyDeletehttps://nymag.com/intelligencer/2022/04/how-private-equity-took-over-air-ambulances.html
Hospice companies have less ability to impact payment rates, so cutting expenses is the way financial rapscallions make big money. If you are a hospice expense, watch out.
Humana traded around $465 per share the day of the announcement. It's now at $435 per share.
ReplyDeleteKKR's buyout of BrightSpring shows how patients can be harmed:
ReplyDeletehttps://www.buzzfeednews.com/article/kendalltaggart/kkr-brightspring-disability-private-equity-abuse
"Managers who did not meet corporate targets were subjected to “focus calls” on which Rousseau, BrightSpring’s CEO; Barnes, the president of the group home division; or other executives would berate them."
ReplyDeleteRousseau once headed Kindred Healthcare's Rehab Division. Bully managers are the worst.
Nebraska RN said "No respect for the nurses"
ReplyDeleteWork/Life balance is horrific! Management asks what they can do to make things better and say that they will do those things, but at the end of the day they’re all about the numbers! Patients are complicated and short timers. You work all day and then are on call all night and expected to work the next day. Seven nurses have quit in the last 4 months and they still don’t care to try and make things better. Blatant disrespect for their nurses.
RN Manager in Virginia said "Small office, lack of management":
ReplyDeleteThe office is small and almost all the nursing staff is new so not a lot of experienced nurses. During the time I was there, the office was disorganized, retention of management staff was poor. I think they would benefit from having management staff that has a bachelor’s degree at minimum. Overall, the experience left me feeling more like a receptionist than an actual nurse manager.
Pros
Nurses and aides are hardworking
Cons
Disorganized
Social Worker in Georgia said "The good: working with patients, The bad: under-staffed
ReplyDeleteNot enough hours in the day to get your work done. Poor compensation for gas reimbursement. Your vehicle will take a beating. Overtime has to be approved but if it's not, the work still has to get done? Unspoken expectation is to take work home (your personal/family time). Strongly suggest a second "work cellphone" (you get messages almost all day, everyday on your personal phone). Poor work life balance.
Hospice News has a story on Humana's profit strategies around Kindred at Home. The price of Kindred Hospice/Community Care still makes no sense.
ReplyDeletehttps://hospicenews.com/2022/05/10/the-thought-process-behind-humanas-kindred-at-home-transactions/
The thought process was greed.
Florida RN said "Don't waste your time" re Kindred Hospice
ReplyDeleteThis company is incompetent on how hospice is ran. They lack proper protocol and structure to care for hospice patient. All they care about is meeting productivity. If you want to be over work with no direction from magament as far as the best alternative to helping families with their loved ones this is the job for you. Don't relay on their triage team they don't have any proper training on how to triage patients they will literally call the nurse for everything. If you want to work for a legitimate hospice work for one that actually have a hospice house and a crisis care team.
Pros
Helping families
Cons
Everything
It won't get better under CDR.
DeleteTexas RN Case Manager said "No work life balance"
ReplyDeletePros
Made own schedule, time management skills
Cons
Salary but worked well over 40 hours a week; High turnover; heavy caseload, lack of management support
Michigan CNA said "Management unfair unless in their click"
ReplyDeleteAs long as your in their "click" of people you reap all the benefits. If your not then you're treated like garbage. No raises the entire time of employment which was 5+years.
Pros
None
Cons
Avoid employment here.
Former Kindred Hospice employee said "No work life balance"
ReplyDeleteHigh case loads, lots of on-call and no merit or cost of living increases. If you opt out of a fleet vehicle you pay for, (180 bucks out of your paycheck a month) they reimburse. 32 cents a mile. Terrible benefits.
Advice to Management -- Practice empathy and active listening.
Curo Health Executive Director said "Worst company ever! Beware!"
ReplyDeleteThis company (at least the NC division) doesn’t care about their employees just about making upper management look good. They put quality care at the bottom of a totem pole at one of the most stressful times of a persons life, when they are on hospice care