The spread of Covid-19 has forced most healthcare companies to hit pause on their M&A activity, especially those in the services sectors. Hospitals are overwhelmed and the Centers for Medicare & Medicaid Services issued guidelines that all elective surgeries, non-essential medical, surgical and dental procedures be delayed, which are likely to stifle physician groups’ revenue flow.
However, some companies have proved to be resilient in the pandemic. Caregiver Inc., a behavioral healthcare company, is one example. It provides services to adults with intellectual and developmental disabilities (IDD). Since 2015, Caregiver has expanded rapidly, building its network across Indiana, Ohio, Tennessee and Texas. In early March, the company announced four more acquisitions, giving it a total of 15 companies in its portfolio.
In Indiana, Caregiver acquired Houston Group Homes, which provides intermediate care for adults with IDD, helping them transition to an independent lifestyle. Houston Group Homes operates in Boone and Montgomery counties, serving approximately 40 individuals in intermediate care group homes.
Over in Ohio, Caregiver added two companies, Absolute Care and Cori Care. The former provides care to about 50 adults with IDD in the Columbus area, including in residential settings with about 130 employees, while the latter provides day rehab services to more than 100 individuals in community residential settings.
And down in Tennessee, Caregiver added Personal Care Choices, which provides in-home care, community-based day services, personal assistance, and personal care to approximately, 40 individuals in Maryville and Cleveland with about 40 employees.
If the name Caregiver rings a bell, that’s because in December 2019 it acquired Mosaic‘s Texas operations, which provides offers therapy services for patients and aging adults with IDD. Mosaic’s Texas branch, which operates under the brands Daybreak, Southern Concepts, St. Giles Living Centers and Unified Care Group, generated roughly $200 million in revenue in 2019.
While not immune to the effects of the Covid-19 pandemic, Caregiver has found ways to adjust its operations and still meet the high demand for its services. “Our day programs have been shifted to smaller sites, such as host homes or group care facilities, so we’re able to continue helping our clients while adhering to safety guidelines,” Gary Nettis, Chief Development Officer of Caregiver, explained. The company not only provides services to groups in smaller settings but also uses telehealth and telepsychiatry, following social distancing guidelines without interrupting services. “Our operations are strong against this pandemic.”
While Caregiver has adapted, other companies and practices seem to be in a tight spot. M&A activity is certainly down in March 2020, based on preliminary results from our Deal Search Online database. Physician Medical Groups, a typically busy sector, might be down over 50%. We’ll be looking at the final results in our upcoming quarterly report, so stay tuned.
