LOUISVILLE, Ky. (AP) – Health insurer Humana Inc. plans its first broad foray into health care delivery in nearly two decades with its intended purchase of Concentra Inc. in an approximately $790 million cash deal announced Monday.
Privately held Concentra, based in Addison, delivers occupational medicine, urgent care, physical therapy and wellness services from more than 300 medical centers in 42 states.
Nearly 3 million Humana medical members live near a Concentra center.
Humana Chairman and CEO Michael B. McCallister said Concentra “brings solid experience across a number of fronts that fit well” with Humana’s strategy.
“We are excited about the opportunity to acquire a strong stand-alone business that reinforces our core businesses while providing both revenue diversification and opportunities for strategic expansion longer term,” McCallister said in a release.
Besides its medical center locations, Concentra also serves employer customers by operating more than 240 worksite medical facilities.
Concentra earns about $800 million in annual revenue. Humana projects that the acquisition will add slightly to its earnings for the year ending Dec. 31, 2011.
The transaction still has to gain regulatory approval but is expected to close next month.
Humana stock added $1.39, or 2.4 percent, to $57.42 in early morning trading Monday.
For Humana, the deal signals a return to its roots as a health care provider.
Louisville-based Humana began as a nursing home company in 1961, then expanded into the hospital business in 1968. It sold its nursing home business in the mid-1970s.
Humana entered the health insurance segment in 1984, and was a combination managed care and hospital company until it sold off its hospitals in 1993.
Humana spokesman Tom Noland said the deal announced Monday moves the company “into promising new territory.” Humana already has a few clinics in south Florida.
“This builds on our caregiving heritage and offers new opportunity in a growing part of health care,” Noland said. “The demand for primary care services will increase partly as a result of demographic trends, notably the aging of baby boomers, and also because of some of the incentives in the new health reform law.”
Concentra CEO James M. Greenwood said, “This combination with Humana is an excellent opportunity to expand service to patients and employers, as well as enhance access to convenient medical care for patients in communities nationwide.”
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