Humana Inc. has signed a definitive agreement to purchase KMG America Corp., a group and voluntary insurance benefits and third-party administration company based in Minnetonka, Minn., for $187.7 million. The transaction will be financed through a combination of cash and debt.
KMG offers life and health insurance products and services to approximately 1.1 million group and individual members nationwide, including stand-alone stop-loss insurance through group employers for approximately 473,000 members and third-party claims administration and medical management services for approximately 131,000 self-insured members.
KMG’s revenues for the year ended Dec. 31, 2006, approximated $181 million.
Louisville-based Humana ranks as one of the nation’s largest publicly traded health benefits companies, with approximately 11.3 million members. The company offers a diversified portfolio of health insurance products and services to employer groups, government-sponsored plans and individuals.
“KMG’s capabilities in voluntary products will complement our major medical offerings in both the employer group and individual product lines,” said Michael B. McCallister, Humana president and chief executive officer. “In addition, KMG’s approach to both marketing and product distribution fit well with Humana’s focus on the consumer.”
The transaction has been unanimously approved by the boards of directors of Humana and KMG and is anticipated to be completed in the first quarter of 2008.