Humana Inc. announced today a new strategic partnership with BlackRock to manage and operate nearly 150 CenterWell Senior Primary Care clinics. Humana BlackRock is an initiative involving funds and accounts managed by HPS Investment Partners, a BlackRock company. Currently, these clinics are run by joint ventures owned by funds affiliated with WCAS and CenterWell.
CenterWell will maintain a minority ownership interest, and the new joint venture will be majority-owned by BlackRock. It will replace the existing CenterWell/WCAS joint ventures. The partnerships have been central to CenterWell’s growth in the last seven years. CenterWell is now the nation’s largest provider of senior-focused, value-based primary care.
“We look forward to this new venture with BlackRock as our partner, while our growing network of CenterWell clinics remains dedicated to serving patients with our unique model of senior-focused, value-based care,” said Dr. Sanjay Shetty, President of CenterWell. “We are grateful to the WCAS team for their strong partnership and meaningful contribution over the past seven years and look forward to continued success for CenterWell Senior Primary Care with the support of BlackRock.”
Strategic Partnership to Support Healthcare Growth
More growth opportunities for CenterWell should be generated by the new arrangement. It will also create additional growth capital and provide Humana with added financial flexibility. At the same time, BlackRock has considerable investment resources and a broad range of experience in private financing. Those capabilities fit with Humana’s plans to grow its senior primary care business.
This is also Humana’s second strategic transaction with BlackRock this year. Humana previously announced that it has entered into a definitive agreement to sell all or substantially all of its minority interest in Gentiva. That transaction will be part of a consortium of investors which includes BlackRock.
WCAS to Acquire Existing Equity Stake in BlackRock
As part of the deal, BlackRock will buy out WCAS’s existing equity stake, which is worth about $2.8 billion. The deal also includes updated terms more in line with the current maturity of the business. The terms are different from those which were set when the original joint ventures were started.
The new joint venture will commit additional capital over the next two years. The investment will help fund existing clinical operations and the establishment of new clinics. Additionally, the new funding will be utilized to make strategic acquisitions to grow the CenterWell network.
CenterWell will run every clinic in the new joint venture. patients will enjoy uninterrupted access to high quality primary care services. Current clinical teams and operating structure will continue to support older patients through the transition.
Future Clinic Buying & Ownership Opportunities
Starting in 2028, CenterWell will have the option to acquire clinics from the joint venture. This option may be exercised by the company at its discretion. This arrangement provides CenterWell with opportunities to pick up clinic locations over time. But if CenterWell has not bought each clinic by the end of 2033, a different provision will be effective. In that case, BlackRock can exit the joint venture via a sale process with the remaining clinics. CenterWell will have a right of first offer to purchase those locations.
The deal does not include a put option. Therefore, Humana expects that the transaction will significantly decrease certain liabilities on its balance sheet. This reduction will be preceded by the elimination of put arrangements for the current joint ventures. BlackRock will have some protections with the new architecture. Humana also expects this partnership to carry a much lower cost of capital. The drop is expected, and is a sign of the maturity of the business and new financial structures in place.
CenterWell Leadership Emphasizes the Partnership
The statement underscores CenterWell’s ongoing focus on delivering senior-focused health care. And it acknowledges the contribution of WCAS in the development of the network. Meanwhile, BlackRock’s investment is being viewed as an opportunity for the company to enter its next phase of growth.
Transaction Expected to Close Fourth Quarter 2026
The companies expect the transaction to close in the fourth quarter of 2026. Completion is subject, however, to customary closing conditions and to approval by state and federal regulators.
Humana does not expect the agreement to have a material impact on its adjusted earnings outlook for 2026. Therefore, the company expects to complete the transition while keeping its current financial guidance.
Humana’s lead financial advisor was Guggenheim Securities, LLC. Goldman Sachs & Co. LLC also served as a financial adviser. Humana’s corporate legal counsel was Fried, Frank, Harris, Shriver & Jacobson LLP.
The Humana BlackRock joint venture is a strategic move in the growth of CenterWell Senior Primary Care. The partnership combines investment capital and CenterWell’s operating expertise to help support clinic expansion and future acquisitions. The new ownership structure is also expected to increase financial flexibility and ensure that care for senior patients continues.
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News Source: Businesswire.com
