Amedisys CEO Offers Sharper Look at M&A Plans
One of the nation’s largest home health and hospice providers has added to its already large pipeline of acquisition targets.
But the company’s CEO has implied that only a small fraction of the potential deals actually matter at this point.
Amedisys Inc. (Nasdaq: AMED) has spoken about its huge pipeline before. Back in November 2015, President and CEO Paul Kusserow revealed that the company had more than 300 deals in its pipeline, a number that had increased from just 17 deals only nine months prior.
At the J.P. Morgan Healthcare Conference in San Francisco on Wednesday, Kusserow said Amedisys currently has more than 400 deals in its “really strong” pipeline. Despite another jump, the pipeline should be considered on a smaller scale, Kusserow said.
“That’s meaningless at this point, it’s kissing a lot of frogs,” he said of the 400-deal pipeline.
“I’d say the real pipe, we’ve probably got 15 to 20 really good deals at decent prices that we think can enhance the program here,” he explained.
Once Amedisys fully implements Homecare Homebase, a brand of hospice and home care software, it will pull the trigger on some of these deals, Kusserow said. Full implementation of Homecare Homebase is expected to occur in the latter half of 2016.
The Baton Rouge, Louisiana-based company is also considering certain types of merger and acquisition deals more than others, Kusserow revealed during the presentation. Specifically, Amedisys is looking for deals like Sarasota, Florida-based Infinity HomeCare, which it acquired in November 2015 for $63 million.
At the time, Infinity had 13% EBITDA margins, 4 STARs quality, very strong traditional Medicare mix, “really strong staffs” and had also been using Homecare Homebase.
“Those are the types of deals we’re going to be looking for in the future, and those are the types of deals we believe are going to be added in,” Kusserow said.
Written by Mary Kate Nelson