Encompass Health Corp. (NYSE: EHC) announced it will acquire Alacare Home Health & Hospice for $217 million dollars. That purchase price was about 1.9x the target’s approximate 2018 revenue of $117 million. Founded in 1970, Alacare provides home health, hospice and palliative care, physical rehabilitation, and specialty programs for dementia, cancer, stroke and heart patients. It has a large presence in Alabama, with 23 co-located home health and hospice agencies across the state.
The deal will add significant territory to Encompass Health’s service area, adding new markets in Alabama. The company provides facility-and home-based patient care through its 127 hospitals and 237 home health & hospice locations in 36 states. After the deal closes, Encompass Health will now own 84 facilities nationwide. The combined platform will be among the ten largest hospice providers in the country based on Medicare reimbursement.
Cain Brothers served as Alacare’s exclusive financial advisor in connection with the transaction. On a trailing 12-month basis, Encompass Health generated revenue of $4.3 billion, EBITDA of $881.3 million, and net income of $290.3 million.