“Private equity makes more sense at this point,” said Kevin Ellich, senior research analyst at Piper Jaffray & Co. said during an interview. “You take the company private and deal with the regulatory and reimbursement headwinds in the next couple of years.”
TPG approached LHC after it announced last month that it had appointed J.P. Morgan Securities LLC to advise it on its options, the people said. This, however, may not necessarily result in an offer, they cautioned.
LHC, which has a market capitalization of about $360 million, said on Feb. 14 that it had begun a strategic review to enhance stockholder value and that it had not set a definitive timetable for completion of the process. Founded in Louisiana in 1994, LHC serves more than 80,000 patients annually in 19 U.S. states. It has said it expects 2012 earnings per share of $1.45 to $1.65, compared with a loss of 73 cents in 2011.
LHC did not respond to a request from HHCN for comment.