Key Takeaways
- • BlackRock is set to acquire the roughly $2.8 billion stake in CenterWell Senior Primary Care held by private equity firm Welsh, Carson, Anderson & Stowe (WCAS), according to Humana's announcement on Tuesday.
- • Under the new structure, BlackRock will hold a majority interest in a network of approximately 150 CenterWell clinics, while CenterWell remains a minority owner and continues to operate independently as a Humana subsidiary.
- • Humana expects a "significant reduction in the liabilities" on its balance sheet as it exits the existing joint venture over time, as the previous WCAS "put" provision is not carried into the BlackRock agreement.
- • CenterWell may repurchase the clinics from BlackRock beginning in 2028, but BlackRock cannot force Humana to buy them out.
- • The deal is expected to close by the end of 2026, with Humana stating there will be no patient care disruptions.
Summary
Humana announced on Tuesday that BlackRock will take over the stake in CenterWell Senior Primary Care currently held by Welsh, Carson, Anderson & Stowe (WCAS), a private equity firm. The stake is valued at approximately $2.8 billion, according to Humana. Once the transaction closes, which is expected by the end of the year, BlackRock will be the majority owner of a network of about 150 clinics that WCAS developed and operated under a 2022 agreement with Humana designed to expand the reach of CenterWell.
The CenterWell brand is associated with more than 350 senior primary care centers across 12 states. As part of the agreement, BlackRock has committed to new investments aimed at growth, including opening new centers and evaluating the possible acquisition of competitors, Humana said. CenterWell will continue to operate as an independent subsidiary of Humana.
Humana said the arrangement will significantly reduce liabilities on its balance sheet as it effectively exits the joint venture over time, though it will provide certain guarantees to BlackRock to secure its protections. Under the terms, CenterWell may buy back the clinics from BlackRock beginning in 2028, but BlackRock cannot compel Humana to do so. The previous WCAS agreement included a "put" provision that could force Humana and CenterWell to purchase their partner's stake; Humana confirmed that provision is absent from the BlackRock deal, reducing associated financial risk.
Sanjay Shetty, MD, President of CenterWell, said in a statement that the company looks forward to the new venture with BlackRock as its partner, while maintaining its model of senior-focused, value-based care. He thanked the WCAS team for its "strong partnership and meaningful contribution over the past seven years." Humana and CenterWell stated that there will be no disruption to patient care as a result of the ownership change.
The CenterWell brand is associated with more than 350 senior primary care centers across 12 states. As part of the agreement, BlackRock has committed to new investments aimed at growth, including opening new centers and evaluating the possible acquisition of competitors, Humana said. CenterWell will continue to operate as an independent subsidiary of Humana.
Humana said the arrangement will significantly reduce liabilities on its balance sheet as it effectively exits the joint venture over time, though it will provide certain guarantees to BlackRock to secure its protections. Under the terms, CenterWell may buy back the clinics from BlackRock beginning in 2028, but BlackRock cannot compel Humana to do so. The previous WCAS agreement included a "put" provision that could force Humana and CenterWell to purchase their partner's stake; Humana confirmed that provision is absent from the BlackRock deal, reducing associated financial risk.
Sanjay Shetty, MD, President of CenterWell, said in a statement that the company looks forward to the new venture with BlackRock as its partner, while maintaining its model of senior-focused, value-based care. He thanked the WCAS team for its "strong partnership and meaningful contribution over the past seven years." Humana and CenterWell stated that there will be no disruption to patient care as a result of the ownership change.
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