The home health and hospice giant Amedisys, Inc. (NASDAQ: AMED) is back with a new deal. Earlier in July, the company announced it was buying Contessa Health, which specializes in hospital-at-home and skilled nursing facility at-home services, for $250 million, or about 3.9x Contessa’s forecasted 2022 revenues of $64 million. And Amedisys expects that by 2025, revenues will grow by 118%.
This is a good opportunity for Amedisys because it gives the company a larger foothold in the in-home services market, increasing its Total Available Market (TAM) from $44 billion to $73 billion, and provides a myriad of new services such as analytics, underwriting and care coordination. Perhaps most importantly, Contessa already has partnerships with seven health systems, including Prisma Health, Mount Sinai and Highmark Health, and is currently in conversation with 133 other health systems across 28 states. Plus, Contessa is hunting for other joint ventures, according to Amedisys’ 8-K filing detailing the acquisition, which has “38% and 49% overlap with Amedisys’ home health and hospice network, respectively.”
Upon closing of the deal, Contessa will operate as a wholly-owned division of Amedisys. The division will serve as a platform for Amedisys for additional and new in-home service line expansions and risk-taking solutions.
Lazard is serving as financial advisor to Contessa, and Bass Berry & Sims is serving as legal counsel. Butler Snow is serving as legal counsel to Amedisys.
