Humana has agreed to form a new joint venture with investment management firm BlackRock to own and operate nearly 150 CenterWell Senior Primary Care clinics, replacing CenterWell’s existing joint ventures with private equity firm Welsh, Carson, Anderson & Stowe.
Funds and accounts managed by HPS Investment Partners, part of BlackRock, will acquire Welsh Carson’s equity stake, valued at about $2.8 billion, according to an Oct. 13 Humana news release. BlackRock will hold majority ownership, while CenterWell will retain a minority stake and continue managing the clinics.
Unlike the previous agreements, the new deal does not give BlackRock the right to force Humana to buy out its stake. Humana said removing that obligation will significantly reduce liabilities on its balance sheet and lower its cost of capital.
Beginning in 2028, CenterWell can buy clinics from the joint venture, according to the release. If CenterWell has not acquired all of them by the end of 2033, BlackRock can exit through a sale of the remaining clinics, with CenterWell holding the right to make the first offer.
The deal marks Humana’s second transaction with BlackRock this year, following its agreement to sell its minority interest in hospice provider Gentiva to an investor consortium that includes BlackRock. The CenterWell transaction is expected to close in the fourth quarter, pending regulatory approval.
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