The parent company of Blue Cross and Blue Shield of Minnesota is selling Livio Health, a business that provides in-home health services to seniors.
Livio will be acquired by Lifespark, a St. Louis Park-based company with a technology platform for helping seniors avoid trips to the hospital.
As part of the agreement, Aware Integrated, the parent company of Eagan-based Blue Cross, becomes a minority owner in Lifespark through a cash investment made in addition to the valuation of Livio Health.
Detailed financial terms of the deal, announced Wednesday, were not disclosed.
"Our investment in Lifespark will help fuel greater growth and innovation in ways that benefit the entire system, across all populations," said Dana Erickson, president and chief executive at Blue Cross, in a statement.
Last year, Lifespark announced a $20 million round of funding that included Minneapolis-based UCare, a rival to Blue Cross in selling health plans to individuals and people covered by the Medicare and Medicaid government health insurance programs.
A regulatory filing from April shows UCare's investment in the company was about $10 million.
"This is more than an acquisition or an investment," said Joel Theisen, CEO and co-founder of Lifespark, in a statement. "It's a significant opportunity to provide Minnesota seniors in both the Twin Cities metro and outstate areas with a different experience than what they have now. ... This is a commitment to break the fragmentation and poor outcomes with an innovative solution."
Livio Health has about 100 employees including doctors, nurse practitioners, social workers and support staff. It delivers primary and urgent care along with palliative services to seniors across Minnesota.
The deal is expected to close in December with no disruption in patient care during the transition.
"The purchase agreement will integrate all operational components of Livio Health, as well [as] Livio Health employees, into the current systems and capabilities of Lifespark throughout the state," the companies said in a news release.
For Aware Integrated, the sale of Livio Health is the second such divestiture in as many years from a group of businesses it operated through a unit called Stella Health. The company launched Stella in 2016 to diversify revenue beyond health plans. In April 2021, Aware announced the sale of Further, a business that administers health savings accounts, to a firm in Utah for about $500 million.
The Stella Health website is no longer active.
"Blue Cross is refocusing our overall diversified approach on companies that have strong alignment with our core health insurance business," the company said Wednesday in a statement to the Star Tribune. "Instead of a separate business identity representing all diversified products and services, Blue Cross will have each diversified brand stand on its own in ways that complement our health plan offerings."
Blue Cross and Blue Shield of Minnesota is the state's largest nonprofit health insurer.
Last year, Aware Integrated posted operating income of $28.3 million on $7.58 billion of revenue, according to a Star Tribune review of financial statements. The figures don't include proceeds from the sale of Further, which significantly boosted net income for the year.