Humana did it. They sold our hospice down the river to yet another financial rapscallion.
Humana Inc. today announced that it has successfully completed its previously-announced transaction with private investment firm Clayton, Dubilier & Rice (“CD&R”) to divest a majority interest in the Hospice and Personal Care divisions of Humana’s Kindred at Home subsidiary (“KAH Hospice”). These divisions include patient-centered services for Hospice, Palliative, Community and Personal Care. Upon closing, the Hospice and Personal Care divisions have been restructured into a new standalone company.
...the new standalone company, soon to become Gentiva.It's official. The Gentiva name is coming back, just as I pondered last September.
It looks like Gentiva might be returning, especially as the Director of Corporate Communications for the company has a gentiva.com e-mail address.
A regulatory filing with the state of Oregon stated:
CD&R Falcon Holdings, L.P. (“Falcon Holdings”), the sole limited partner of Falcon Hospice, would acquire a 60% ownership interest in KAH Hospice Company, Inc. (“KAH Hospice”). KAH Hospice is currently owned by Gentiva a wholly owned subsidiary of Humana.
The Oregon analysis highlighted the negative impact Bain Capital's ownership had on Aveanna Healthcare,
"caregivers were made to focus on profit maximization and overextend themselves...patient care ultimately suffered." Bloomberg article 10-22-19
Former Gentiva CEO Tony Strange is CEO of Aveanna.
Oddly, Humana's most recent SEC filing showing Q2 results has not one mention of their wholly owned subsidiary Gentiva.
CDR borrowed $1.6 billion via a term loan from Goldman Sachs to help finance the deal. It originally sought nearly $2.5 billion in loans but dropped a $400 million term loan A.
I was unable to find a debt rating for any of the possible entities associated with the deal, Falcon Holdings, CD&R Falcon Holdings, Kindred Hospice, KAH Hospice, or Gentiva (the name used for prior debt ratings).
There is a B3 debt rating for Charlotte Buyer, Inc. that covers Kindred at Home Hospice/Kindred Hospice. It states:
The borrower under the credit agreement is Charlotte Buyer, Inc. There is a downstream guarantee from an intermediate holding company, but not from KAH Hospice Company, Inc., i.e. the future filer of the financial statements.
KAH Hospice is majority private equity owned, which could lead to an increasingly aggressive financial policy over time.
Alternative sources of liquidity are limited as substantially all assets are pledged.
...financial policies will be aggressive under majority private equity ownership including debt-funded acquisitions to drive growth.
Next level financial rapscallion ownership is upon us. I expect it to be extremely painful.
Anonymous
Aveanna's earnings call with Wall Street analysts produced this from Chairman Rod Windley (formerly of Gentiva):
ReplyDelete... our wage differential is different between one payer to another. And so a nurse that works for payer A, that works with patients with payer A might get paid one rate and a nurse that works with payer B patient might get paid a totally separate rate that's less.
Hope CDR doesn't try this nonsense with hospice staff.
ReplyDeleteGlassdoor cons for Kindred Hospice in August 2022:
A ton of turnover. Management pretends to care.
Micro managed
Teams do not communicate
Unrealistic goals
Insurance terrible, large deductibles, sliding ER HSA contribution. HR department processes are not very professional, allow retaliation and clickish behavior.
Terrible patient care provided by some nurses. No accountability for field staff or office staff. They blatantly don’t follow Medicare regulations. Complaints from patients and families aren’t taking seriously or addresses. Unclear job expectations. Expectations are always changing and you’re made to feel like you’re never good enough. Patients certainly don’t come first. The needs and laziness of staff comes before patient care. If someone’s out sick or on vacation instead of getting visits covered they just decrease visit frequency to better suit them rather with no care or concern for the patients needs.
The company is going through corporate changes.
Glassdoor has a new Gentiva Health Services page started in 2022. It has 8 reviews thus far.
ReplyDeleteAveanna's stock closed at $1.63 a share today.
ReplyDelete"Seeking Alpha" panned Aveanna's stock:
While the situation is not entirely dismal yet, it is still very challenging, as quite frankly, I see no reason to get involved here given the poor track record of the management team since the IPO. At these low levels, it is too dangerous to bet against the company and shares now, but I see no green shoots to get involved here on the long side as well.