Humana Inc. is in “advanced talks” with two private-equity firms to acquire Kindred Healthcare Inc. in a deal that would value the medical operator at $4 billion including debt, the Wall Street Journal reported.

Humana, TPG, and Welsh, Carson, Anderson & Stowe LP would run Kindred’s home and hospice-care business together, while the two private-equity firms would take over Kindred's facility operations that include acute-care hospitals and rehabilitation centers, the newspaper reported Sunday, citing people familiar with the matter that it didn’t name.

The deal is said to value Kindred at $9 a share, according to the Journal, compared with the company’s closing stock price on Dec. 15 of $8.60. The deal, which could still fall apart, may be announced soon, the newspaper said.

Humana, which this year was forced to scrap a proposed $37 billion combination with rival Aetna Inc. amid antitrust opposition, said last month it would eliminate 2,700 jobs, or 5.7 percent of its workforce to cut costs amid shifts in the health-insurance business. The company’s shares have gained 24 percent this year, closing at $253.64 on Dec. 15.

The changes in the health-insurance industry have led to a recent spate of deals. Earlier this month, CVS Health Corp. said it would buy Aetna Inc. for about $67.5 billion, combining the largest U.S. drugstore chain with the third-biggest health insurer. Also, UnitedHealth Group Inc. said it would buy DaVita Inc.’s physician-network business for $4.9 billion, adding hundreds of medical clinics to the biggest U.S. health insurer.

Alex Kepnes, a spokesperson for Humana, didn’t immediately respond to a request for comment. A phone call to Kindred spokesman Todd Flowers wasn’t immediately returned. A TPG representative declined to comment, while a phone call to Welsh, Carson, Anderson & Stowe wasn’t immediately returned.

Instant Insights /

Humana said to be in talks to buy home and hospice-care business

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