Tech-enabled primary care company Cano Health is selling off its senior-focused clinics to Humana's CenterWell in Texas and Nevada, according to an announcement.
Cano said the deal is valued at $66.7 million, including $35.4 million in cash to be paid at closing.
Cano Health has faced dwindling finances and last month laid off 17% of its workforce as it mulled a deal. The company said the proceeds from the sale to CenterWell will allow it "to remain in compliance with the covenants under its debt instruments at the end of Q3 2023." This includes keeping the company beneath the threshold for compliance with the financial maintenance covenant it has in place with Credit Suisse.
Additional funds from the deal will go toward "general corporate purposes," Cano said.
"We are excited to be taking one of our many planned steps in our previously-announced strategy to gain greater efficiency by refining our footprint and focusing on improving our operational and medical cost performance across our Florida market," said Mark Kent, Cano Health CEO, in the announcement. "The net cash proceeds from this sale strengthen our balance sheet, allowing us to continue executing on our plan and supporting our mission of providing market-leading primary care."
"We appreciate CenterWell recognizing the value that Cano Health created in Texas and Nevada and look forward to them continuing to deliver high quality care for our patients there," Kent added.
Cano Health said that as of Aug. 1, its senior-focused primary care clinics in the two states treated about 15,200 patients.
The company has weighed multiple avenues to shore up its finances as losses mount, including a potential sale to CVS Health a year ago that fell through.
In addition, Humana has set significant growth targets for its CenterWell business, to which the deal with Cano Health will no doubt prove a boon. The Medicare Advantage insurer said it plans to open between 30 and 50 new clinics each year through 2025 and earlier this year opened its 250th location.