Amedisys Inc. (NASDAQ: AMED) has released an extensive list of potential acquisition targets as the major home health and hospice provider looks to expand to new markets.
The list, which includes the names of more than 200 candidates for acquisitions, joint ventures and partnerships, comes after Amedisys announced last month its plan to move its executive team from Baton Rouge, Louisiana to Nashville, Tennessee. The 200-prospect figures is a jump from just 15 prospects in its deal pipeline six months ago.
“We have a lot of firepower, a lot of power, to go out and buy things on a large scale,” CEO Paul Kisserow said in an interview with Reuters.
The targets are the latest of Kusserow’s initiatives since taking the Amedisys reins in December 2014. At that point, the provider was trying to bounce back from a $150 million federal legal settlement and an all-around troubled balance sheet.
Now, the company is looking at deals in the range of $50 million and higher on both the home health care and hospice sides of its business, Kusserow said, at a time when the government is weighing a host of changes to how it pays for Medicare patients’ home health care, including new quality benchmarks tied to reimbursement rates.
These changes could prove beneficial to Amedisys, he said.
“There is going to be tremendous consolidation in the industry if these things come close to fruition,” Kuserow told Reuters.
Amedisys is one of a handful of larger players in the home health care sector, for one, competing with the likes of Kindred Healthcare Inc., Almost Family Inc. and LHC Group. Tying Medicare payments to quality measures could negatively impact Amedisys’ more than 12,000 “mom-and-pop” competitors, Jeffries analyst Brian Tanquilut told Reuters, paving the way for consolidation.
Otherwise, Amedisys stands to benefit from a growing demand for home health care as Medicare continues to focus on cutting costs, Tanquilut said. And the stock market pullback could make valuations more attractive, Kusserow said.
“My hope is that this correction pushes down some of the hospice pricing that is out there,” he said.
Written by Kourtney Liepelt