Strange Tony,
Kindred at Home President David Causby made his first king's ransom when Humana and financial rapscallions bought the company on the cheap. His second came in August 2021 when the value of his stock rose 87% in three short years. A galling third could come when Humana monetizes our hospice yet again.
Humana's latest SEC filing indicates how richly it valued Kindred at Home relative to the paltry $9 per share amount Kindred Healthcare shareholders received in 2018.
"compelling all-cash transaction with affiliates of TPG Capital, Welsh, Carson, Anderson & Stowe and Humana Inc."
"total funds needed to complete the merger and the transactions contemplated by the separation agreement (including the funds to pay Kindred stockholders and to pay the holders of other equity-based interests the amounts due to them under the merger agreement), which would be approximately $821.9 million."
Humana purchased 40% of Kindred at Home which represented just over one third of Kindred Healthcare's annual revenues. Breaking down the $821.9 million in KND equity as a proportion of revenue associated with that segment reveals:
40% of Kindred at Home Humana = $114 million
60% of Kindred at Home WCAS/TPG = $171 million
Kindred Healthcare WCAS/TPG = $536 million
Humana valued its initial equity stake (which includes Curo Health) at $1.3 billion, over 10 times what shareholders received. That increased to $2.4 billion, 21 times the value of KND equity in 2018.
Humana purchased the rest of Kindred at Home in August 2021. Assets equals liabilities plus shareholder equity.
Assets = $9.1 billion
Liabilities = $2.9 billion
Shareholder equity = $9.1 billion - $2.9 billion or $6.2 billion
Somehow $285 million in 2018 KAH shareholder equity turned into $6.2 billion, a multiple of 21.7 times.
Of the $9.1 billion in assets nearly $5.8 billion is goodwill and $2.3 billion in other intangible assets. That's $8.3 billion in assets that could potentially evaporate.
KND Shareholders weren't the only ones short-sheeted by Humana et al. My hospice coworkers received no to paltry raises while executives robbed them of fair pay for hours worked and miles driven. Greedy executives cannot take it with them when they leave this earthly plane.
Anonymous
Humana CEO Bruce Broussard just filed to sell $22.7 million in HUM stock. This comes after an earlier filing where he sold $10.3 million. That totals $33 million.
ReplyDeleteBroussard is the executive who enriched financial rapscallions at the expense of my hospice co-workers. WCAS and TPG made huge returns, as did Kindred at Home's executive suite. Disgusting.
That's a rich valuation for a company with no revenue growth under Humana/TPG/WCAS ownership:
ReplyDeleteRevenues are approximately $3 billion LTM June 30, 2021.
https://www.moodys.com/research/Moodys-upgrades-Gentivas-CFR-to-Ba2-stable-outlook--PR_455236
Kindred at Home and Curo Health had a combined $3 billion in revenue in 2018.
Moody's said "KAH is experiencing labor pressures, but Moody's does not forecast a material impact at this time."
How will employees fare in this next flipping? They didn't do well at all when Kindred sold to Humana its greedy private equity partners.
ReplyDeletehttps://generichospice.blogspot.com/2018/05/loyal-employee-stockholders-shafted.html