A large managed care company is scooping up a company that sells employee-paid insurance products through the worksite.
Humana Inc., Louisville, Ky., has agreed to pay about $188 million in cash for KMG America Corp., Minnetonka, Minn., the parent of Kanawha Insurance Company.
The price includes the assumption of about $50 million in debt, Humana says.
KMG generates about $181 million in annual revenue by selling group and voluntary insurance benefits, and by administering benefit plans for employers.
KMG runs stand-alone stop-loss insurance plans for employer plans with a total of about 473,000 members, and it administers claims and provides medical management services for self-insured plans with about 131,000 members, Humana says.
In the past few quarters, KMG has been restructuring its stop-loss program to address concerns about claims.
The boards of Humana and KMG already have approved the Humana-KMG deal.
The deal is subject to approval by KMG shareholders and a number of regulatory agencies, including the South Carolina Department of Insurance.
The companies hope to complete the deal by March 30, 2008.