Humana to Buy SeniorBridge - Analyst Blog
November 30 2011 - 6:45AM
Zacks
Yesterday, Humana Inc. (HUM) announced an
agreement to acquire chronic-care provider SeniorBridge for an
undisclosed amount. However, the purchase is subject to state and
federal regulatory approvals.
SeniorBridge is an 11-year old New York-based healthcare
provider, which offers in-home care to seniors with chronic
diseases such as Alzheimer’s disease, Parkinson’s disease and
congestive heart failure. It has a network of 1,500 care managers
in the U.S.
SeniorBridge’s projected revenue for 2011 is $72 million.
However, the deal is not likely to have any material impact on the
2011 earnings of Humana as it is expected to culminate in the first
half of 2012.
Further, the acquisition will expand Humana’s Health and Well
Being segment, which provides primary care, pharmacy, integrated
wellness, and home care services. While SeniorBridge currently
concentrates on providing care to private-pay customers, the
in-home care service will complement the Humana Cares division of
the group company, which offers care management services to 185,000
chronically ill people.
SeniorBridge’s services will be particularly useful for Humana’s
Medicare members as professional post-hospitalization home care
will significantly reduce readmissions and will also ensure speedy
recovery. Moreover, professional care at home will improve the
general health of the old and chronically-ill members of
Humana.
The demand for in-home care is bound to grow with the increasing
age of the baby boomer population. The populace eligible for
Medicare is expected to increase to 55 million by 2020 and 72
million by 2030 from 40 million at present. Moreover, current
demographic data indicates that about 73% of the senior population
has at least two chronic diseases.
Humana Inc. is one of the largest health care plan providers in
the U.S. and competes with companies like WellPoint
Inc. (WLP) and Aetna Inc. (AET). The
company has been on an acquisition spree this year and has been
rapidly expanding its Medicare business.
In September this year, Humana’s subsidiary, Concentra Inc.,
acquired four urgent care medical centers from NextCare Inc. In the
same month, the company announced a deal to acquire
California-based MD Care, which Care is a privately-held health
maintenance organization that operates in southern-California.
Earlier, in August 2011, Humana declared its intention to
acquire California-based privately held Arcadian Management
Services (AMS), a Medicare Advantage health maintenance
organization, which has members in 15 U.S. states.
Currently, the company carries a Zacks #2 Rank, implying a
short-term Buy rating.
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