Humana buying Boca Raton's Metropolitan Health for $850 million
Humana Inc., the second-biggest private Medicare insurer, agreed to buy Boca Raton-based Metropolitan Health Networks Inc. for about $850 million including debt as it deepens its bets on government-backed insurance.
Humana also reported third-quarter profit that fell less than analysts estimated, raised its earnings forecast for the year and said President Bruce Broussard, previously announced as incoming chief executive officer, will take over Jan. 1.
Stockholders of primary-care provider Metropolitan Health will receive $11.25 a share in cash, the companies said in a statement. The price is 3.7 percent above Metropolitan Healths closing level Nov. 2. Louisville, Kentucky-based Humana also will buy a company that helps doctors share patient records and a stake in another medical provider.
The purchase of Metropolitan Health gives Humana a company with experience coordinating care for 87,500 customers mostly covered by Medicare, the U.S.-backed program for the elderly and disabled, and Medicaid, the joint state-federal program covering the poor. Both are expected to grow as the U.S. population ages and government services expand under the 2010 health-care law passed by Congress.
The deals significantly advanced our strategy of aligning physician pay to quality, Broussard said in a statement Monday. Combined with previous acquisitions, Humana will soon employ or have strategic investments in medical practices that include nearly 2,300 physicians nationwide.
The purchase of Metropolitan Health is expected to close in next years first quarter.
Humana also agreed to buy San Jose, California-based Certify Data Systems, a health-information exchange company that helps doctors share electronic medical records, and purchased a non-controlling equity interest in MCCI Holdings LLC, another care provider that primarily serves Medicare and Medicaid members in Florida and Texas. Terms of those deals werent disclosed. Humana said the acquisitions would increase earnings modestly in 2013.
Third-quarter profit fell 4 percent as Humana continued to grapple with higher-than-expected medical costs.
Net income fell to $426 million, or $2.62 a share, from $444.8 million, or $2.67, a year earlier. The company said it expects profit of $7.25 to $7.35 a share, after cutting its forecast in June due to rising costs.