Almost Family Acquires WillCare for $50 Million, Targets Personal Care Growth

Almost Family (Nasdaq: AFAM) is significantly expanding its personal care offerings by acquiring WillCare HealthCare in a roughly $50 million deal, the company announced Wednesday.

With the addition of WillCare, Louisville-based Almost Family is increasing the size of its personal care segment by nearly one-third, to an expected $150 million in annual revenue, according to a press release.

The deal offers growth in an area where Almost Family already is seeing success: It netted record revenues of $112.5 million in its personal care segment in 2014, the company announced in an earnings report also issued on Wednesday.


WillCare operates 16 branches in three states, with most locations in New York. Adding the Empire State locations “fills a gap” in Almost Family’s presence in the Northeast, Chairman and CEO William B. Yarmouth stated in a release. Once the acquisition is closed — anticipated to occur the second half of this year — Almost Family will have 230 branches in 15 states.

Most of WillCare’s New York operations are near Buffalo and in the Hudson Valley north of New York City. In 2014, the company generated $72 million in revenue. Of this, $37 million would have been classified in Almost Family’s personal care segment and $35 million in its visiting nurse segment.

The purchase price for the acquisition of WillCare’s stock is estimated to be between $46 million and $53 million, subject to a working capital adjustment. It is being funded through a $175 million secured revolving credit facility.


Almost Family has been in growth mode, having completed the largest acquisition in the company’s history— of SunCrest —  in 2014.

The company is bullish on the future of home health care in large part because Affordable Care Act policies, such as Medicare reimbursements tied to hospital readmission rates, are making the sector increasingly important, noted President Steve Guenther.

“Additionally, our M&A track record and capital market and industry relationships continue to position us as a consolidator in home health,” Guenther added.

While the WillCare acquisition suggests an increasing interest in personal care, Almost Family also achieved record revenues of $380.8 million for its visiting nurse segment in 2014. Its visiting nurse services include skilled nursing and therapy for Medicare beneficiaries. Its personal care segment involves custodial care and daily living support.

Demand for private-pay personal care in the home may well increase substantially in the coming years, with the percentage of high-income seniors having been on the rise for decades, according to a recent report on home care franchises.

Overall, Almost Family reported record net service revenues of $495.8 million in 2014, and adjusted earnings from home health operations of $4.5 million, $0.47 per diluted share.

Written by Tim Mullaney

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