After a quiet year on the acquisition front, LHC Group (NASDAQ: LHCG) and LifePoint Health have expanded their joint venture (JV) into three new states. The purchase includes CMH Home Health Care in Wilmington, Ohio, Casa de la Paz Hospice in Sierra Vista, Arizona, and St. Joseph Family Hospice in Lewiston, Idaho. LHC Group will assume management responsibility for the agencies, which will continue to operate from their current locations and under the same names. LHC expects approximately $3.6 million in annualized revenue from this expansion and anticipates that it will not materially affect its 2019 diluted earnings per share.
LHC Group and LifePoint Health formed the partnership to share ownership of home health and hospice providers across LifePoint’s footprint in January 2017. In 2018, the JV reported three deals in the southeastern United States. In September, the JV bought Wilson County Home Health from Wilson County, North Carolina, which serves patients and families in the county and the surrounding region. The acquisition was effective September 1 and the agency’s name was changed to Home Health of Wilson. The agency began operating in a new location in Wilson once the deal transpired. The home health agency is now affiliated with Wilson Medical Center, a 294-bed facility affiliated with LifePoint through Duke LifePoint Healthcare.
The JV then reported two deals in December. It bought both locations for Virginia-based Commonwealth Home Health Care, which provides medical equipment, home oxygen, safety, and rehabilitation products, as well as respiratory and medical equipment consultations. LHC Group claimed majority ownership in the agency and assumed management responsibility of the agency, which kept its name. Commonwealth Home is now affiliated with Sovah Health-Danville, a LifePoint Health facility.
The second deal targeted Guardian Health Services, which at the time was a locally owned and operated agency serving seven counties surrounding Hickory, North Carolina. LHC Group took majority ownership in Guardian Health Services and changed its name to Guardian Home Health. The agency became affiliated with Frye Regional Medical Center, which is part of Duke LifePoint Healthcare.
As for the Home Health & Hospice sector in general, Q4:19 is off to a healthy start compared with Q3, according to our Deal Search Online database. Last quarter, there were a total of 20 deals, with TowerBrook Capital Partners and Ascension‘s $1 billion acquisition of Hospice Compassus leading the way. Formation Capital and Audax Private Equity were the sellers in that deal. The sale was the result of a Jefferies-run auction that started in early 2019. TowerBrook and Ascension will own approximately equal equity stakes in Hospice Compassus. This quarter there have been eight deals in the sector, in just the first month. At the current pace, we expect to match or equal last quarter’s results. As of now, no prices have been disclosed, but there’s still time for more headline deals.
Trackbacks/Pingbacks