Visiting Nurse Association to Sell Home Health, Hospice Operations to Amedisys

Amedisys Inc. (Nasdaq: AMED) expected to do plenty of dealmaking heading into 2020 and Year 1 of the Patient-Driven Groupings Model (PDGM).

Those plans, however, were largely put on pause for the Baton Rouge, Louisiana-based home health, hospice and personal care services company due to the COVID-19 pandemic. While Amedisys remained active on the M&A front, many would-be sellers put off their potential transactions due to “no-strings attached” relief money, Medicare loans and other financial lifelines.

As Chairman and CEO Paul Kusserow anticipated, Amedisys is already finding more success in the first half of 2021.

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“We are continuing to look for more significant ways to deploy capital to grow inorganically throughout 2021,” Kusserow said at the end of April. “While these are small deals, they increase our presence in strong markets and are geographically strategic. We are active and successful in the M&A market, and expect to do more and bigger deals as the year progresses.”

On Tuesday, Amedisys announced that it has entered into an agreement to take over the home health and hospice operations of Visiting Nurse Association (VNA), a 125-year-old nonprofit that delivers in-home care services in Omaha, Nebraska, and Council Bluffs, Iowa. Financial terms of the transaction were not disclosed.

The deal is expected to close on or around July 1.

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In addition to home health and hospice care, VNA offers homeless shelter nursing services, parenting support, school health programs and more. A return to its original focus on serving the needy and socially vulnerable populations is partly why it is transitioning its home health and hospice operations to Amedisys, according to VNA President and CEO James Summerfelt.

“As VNA reflects on its mission and long history, it has become clear that we should return to our original focus — to serve those in the community who may not have the resources for home health and hospice care services,” Summerfelt said in a press release announcing the news. “This was our original mission, and there is still tremendous need in our community. We want to ensure that the needs of individuals and families can be met with expertise and compassion well into the future.”

VNA also identified a need to consider eternal investors to make sure its home health and hospice programs remained financially viable “for years to come,” the nonprofit noted.

“By continuing the exceptional VNA home health and hospice care legacy, Amedisys will provide additional scale and resources that will expand our opportunities to care for more patients and expand home health services to more communities across Nebraska and Iowa, especially during these unprecedented and evolving times in the health care industry,” Amedisys President and COO Chris Gerard said in the release.

Speaking at the 2021 Bank of America Healthcare Conference, Kusserow offered further insight into the VNA deal hours after it was announced.

Although the move isn’t a major one for Amedisys, the CEO said the company chose to highlight it to showcase how it can deliver a nonprofit-level commitment to care quality.

“We want to be able to articulate that we can take really good care of people just like a not-for-profit or a VNA could,” Kusserow said. “We’re very excited about this, and we want to continue to show good results.”

Amedisys currently delivers services across 514 care centers throughout 39 states and the District of Columbia.

The provider has at least four hospice locations in the Omaha market, according to its website. Meanwhile, it has at least one hospice location in the Council Bluffs area.

Tuesday’s news comes a little over a month after Amedisys announced plans to acquire the regulatory assets of a home health provider operating in Randolph County, North Carolina.

As far as future dealmaking, Amedisys is focused broadly on two types of transactions: smaller acquisitions it can execute quickly, then bigger, bolder moves that add to its core services or create areas of distinction.

One of the roadblocks to getting larger deals done is the ravenous appetite of private equity, Executive Vice President and CFO Scott Ginn noted during the Bank of America event.

“When you start looking at deals that have the larger infrastructure, you’re going to see private equity come in pretty hard and look to really build a platform off of that,” Ginn said. “So those can be challenging.”

To bypass bidding wars, Amedisys typically tries to source its own deals and strike preemptively.

“A lot of the deals we’re closest to now are preemptive deals that haven’t had an auction, for one reason or another,” Kusserow explained. “Generally, we try to go with a good price preemptively. And we’re pretty aggressive on that front.”

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