Humana Closes MD Care Acquisition - Analyst Blog
05 Gennaio 2012 - 1:15PM
Zacks
On Wednesday, Humana Inc. (HUM) announced the
completion of its acquisition of California-based MD Care. The
closure of the deal took less than four months since the
announcement in September 2011. The financial terms of the deal
were not disclosed.
Humana does not expect the acquisition to significantly affect
its 2012 earnings, even though it will boost the company’s Medicare
Advantage policyholders by almost 15,000. Although MD Care’s
policyholders will now be covered by Humana, they will not face any
significant changes in their coverage.
MD Care is a three-year old privately-held Medicare Advantage
health maintenance organization that operates in four
southern-California counties, namely Los Angeles, Orange, San
Bernardino and Riverside. It offers Medicare Advantage medical,
prescription drug and special needs plans.
The acquisition of MD Care is a part of a series of purchases
announced by Humana in 2011. The company is one of the leading
Medicare providers in the US and has been rapidly expanding its
business through acquisitions.
In December 2011, Humana announced the acquisition of Antiva
Health, a health care analytics company. Before that, in November
2011, the company also inked a deal to acquire healthcare provider
SeniorBridge, which offers in-home care to seniors with chronic
diseases.
Earlier, in September 2011, Humana’s subsidiary, Concentra Inc.,
acquired four urgent care medical centers from NextCare Inc., while
in August, the company announced the purchase of another Medicare
Advantage health maintenance organization, Arcadian Management
Services.
Humana is not alone in this acquisition spree. Its peers in the
health insurance industry – such as CIGNA
Corp. (CI) and UnitedHealth Group (UNH) –
have also been expanding their businesses via acquisitions.
While UnitedHealth announced its plan to acquire XLHealth Corp,
a sponsor of Medicare Advantage health plans, in November 2011,
Cigna finalized the acquisition of UK-based FirstAssist Insurance
Services in December 2011 and announced its intention to acquire
HealthSpring Inc. (HS) in October 2011.
Humana currently carries a Zacks #2 Rank, indicating a
short-term ‘Buy’ rating. However, considering the fundamentals, we
maintain our long-term ‘Neutral’ recommendation on the shares.
CIGNA CORP (CI): Free Stock Analysis Report
HEALTHSPRING IN (HS): Free Stock Analysis Report
HUMANA INC NEW (HUM): Free Stock Analysis Report
UNITEDHEALTH GP (UNH): Free Stock Analysis Report
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