Key Takeaways
- • Humana entered a new joint venture with HPS Investment Partners, a BlackRock affiliate, to manage funds and accounts across a network of nearly 150 CenterWell Senior Primary Care clinics, replacing existing joint ventures with Welsh, Carson, Anderson & Stowe (WCAS).
- • BlackRock will acquire WCAS's current equity ownership in the clinics, valued at about $2.8 billion, and the new JV will be majority owned by BlackRock with CenterWell as minority owner.
- • Humana expects the structure to reduce balance sheet liabilities tied to put arrangements in its existing joint ventures, lower its cost of capital, and provide growth capital, with no put option in the new JV.
- • The transaction is expected to close in Q4 2026, subject to customary closing conditions and state and federal regulatory approvals, and is not expected to materially affect Humana's 2026 adjusted earnings guidance.
- • The deal is Humana's second strategic transaction with BlackRock in 2026, following the earlier agreement to divest its minority interest in Gentiva to a consortium that includes BlackRock.
Summary
Humana has entered a joint venture with HPS Investment Partners, a BlackRock affiliate, to manage funds and accounts across a network of nearly 150 CenterWell Senior Primary Care clinics. The new structure replaces CenterWell's existing joint ventures with Welsh, Carson, Anderson & Stowe (WCAS). BlackRock will acquire WCAS's current equity ownership in the clinics, valued at about $2.8 billion. The new joint venture will be majority owned by BlackRock and minority owned by CenterWell, which will continue to manage and operate all clinics held through the venture.
Humana said the transaction should improve balance sheet efficiency, provide additional growth capital, increase financial flexibility, and reduce its cost of capital. The company also expects a significant reduction in balance sheet liabilities associated with put arrangements in its existing joint ventures, as the new venture does not include a put option. Humana describes the lower cost of capital as reflecting the maturity of the CenterWell business. Over the next two years, the joint venture is expected to deploy additional capital to support existing clinical operations, establish new clinics, and expand through strategic acquisitions. Humana describes CenterWell Senior Primary Care as the nation's largest provider of senior-focused value-based primary care.
Under the terms outlined by Humana, CenterWell will have the option to purchase clinics from the joint venture at its discretion beginning in 2028. If CenterWell has not acquired all remaining clinics by the end of 2033, BlackRock will have the right to pursue a sale process for those clinics, subject to CenterWell's right to submit the first offer.
The transaction is Humana's second strategic deal with BlackRock in 2026, following its earlier agreement to divest all or substantially all of its minority interest in Gentiva to a consortium of investors that includes BlackRock. The CenterWell transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions and state and federal regulatory approvals. Humana said it is not expected to materially affect its 2026 adjusted earnings guidance.
Guggenheim Securities served as Humana's lead financial advisor, with Goldman Sachs acting as financial advisor. Fried, Frank, Harris, Shriver & Jacobson served as corporate legal counsel. Dr. Sanjay Shetty, President of CenterWell, said the company looks forward to the venture with BlackRock as its partner and thanked the WCAS team for its partnership and contribution over the past seven years.
Humana said the transaction should improve balance sheet efficiency, provide additional growth capital, increase financial flexibility, and reduce its cost of capital. The company also expects a significant reduction in balance sheet liabilities associated with put arrangements in its existing joint ventures, as the new venture does not include a put option. Humana describes the lower cost of capital as reflecting the maturity of the CenterWell business. Over the next two years, the joint venture is expected to deploy additional capital to support existing clinical operations, establish new clinics, and expand through strategic acquisitions. Humana describes CenterWell Senior Primary Care as the nation's largest provider of senior-focused value-based primary care.
Under the terms outlined by Humana, CenterWell will have the option to purchase clinics from the joint venture at its discretion beginning in 2028. If CenterWell has not acquired all remaining clinics by the end of 2033, BlackRock will have the right to pursue a sale process for those clinics, subject to CenterWell's right to submit the first offer.
The transaction is Humana's second strategic deal with BlackRock in 2026, following its earlier agreement to divest all or substantially all of its minority interest in Gentiva to a consortium of investors that includes BlackRock. The CenterWell transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions and state and federal regulatory approvals. Humana said it is not expected to materially affect its 2026 adjusted earnings guidance.
Guggenheim Securities served as Humana's lead financial advisor, with Goldman Sachs acting as financial advisor. Fried, Frank, Harris, Shriver & Jacobson served as corporate legal counsel. Dr. Sanjay Shetty, President of CenterWell, said the company looks forward to the venture with BlackRock as its partner and thanked the WCAS team for its partnership and contribution over the past seven years.
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