Humana (NYSE: HUM) will buy Concentra for $790M

Insurance behemoth Humana (NYSE:HUM) announced Monday that it will buy Concentra Inc., a privately held healthcare company, for $790 million cash.

The acquisition will give Humana more than 300 medical centers in 42 states where Concentra delivers occupational medicine, urgent care, physical therapy and wellness services to workers. Nearly 3 million Humana customers live near a Concentra center. Concentra's annual revenues are about $800 million.

The move comes as insurers seek to prepare for a future in which healthcare providers and payers will be expected to work more closely together and pay is tied more closely to performance.

Acquiring a healthcare provider will help Humana keep costs down for customers, Michael McCallister, Humana's chairman and CEO, told the Dallas Morning News. The deal will also give Humana a way to enhance its wellness programs, and is expected to close next month, according to a statement from the Louisville, Ky.-based insurer.

The transaction also is expected to be a source of unregulated cash flows, according to a press release from insurance rating company A.M. Best.

"Like all retailers, [Humana wants] to have more ways to build a relationship with their consumer and this is another step in that direction," Dave Shove, a BMO Capital Markets analyst told Bloomberg.

Concentra's high-profile clients include Hewlett-Packard and Whole Foods Market. The company also provides on-site medical services for many large corporate clients.

To learn more:
- read Humana's press release
- read A.M. Best's press release
- here's the Dallas Morning News article
- read the Bloomberg article

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