A home health giant is continuing its acquisition charge this year with another round of transactions that have pushed the heath care services provider into new territory and on track for a record year of transactions.
Lafayette, Louisiana-based LHC Group, Inc. (NSADAQ: LHCG) has signed definitive purchase agreements to acquire a number of home health, hospice and community-based services in Washington, D.C. and Little Rock, Arkansas. The transaction represents the company’s first entry in the D.C. market. The two acquisitions produce approximately $44 million in annualized revenues, consisting of $23.3 million in home health revenue, $5.1 million in hospice revenue and $15.6 million in community-based services revenue.
The transactions put the company ahead of its goal to have a “record” revenue year. LHC Group also recently entered another new market, Arizona, in a joint venture to expand home health and hospice services.
“Thus far in 2016, we have announced transactions generating annualized revenue of $60 million, putting us on pace to exceed our record year of 2014, which had nine announced transactions with annualized revenue totaling $105.5 million,” Keith G. Myers, LHC Group’s chairman and CEO, said in a statement.
The company has its eyes on an “unprecedented” acquisition pipeline with up to $1 billion in revenue.
In the latest transaction, LHC Group is acquiring Professional Healthcare Resources (PHR), a home health care services provider that offers skilled nursing, therapy, personal care services and hospice. With its headquarters in Annandale, Virginia, PHR’s licensed service area cover 16 counties in the certificate of need (CON) District of Columbia, the CON state of Maryland and the state of Virginia. The annualized revenue from PHR is estimated at approximately $33.5 million and is expected to be accretive to LHC Group’s 2017 earnings per diluted share by between $0.10 and $0.15.
LHC Group is also acquiring East Arkansas Health Holdings, a Little Rock, Arkansas-based with four home health locations, two hospice locations and a community-based services location that serve 11 counties in the state. Estimated annualized revenue from the acquisition is approximately $10.5 million and is expected to be accretive to LHC Group’s 2017 earnings per diluted share by between $0.05 and $0.10.
“We are very pleased to announce these two transactions, which strengthen our presence in Virginia, Maryland and Arkansas—and provide our initial presence in Washington, D.C.—with well-regarded organizations and outstanding teams,” Myers said. “These transactions are wholly consistent with our acquisition growth strategy, which seeks to leverage increasing consolidation pressures in a highly fragmented industry to purchase assets and acquire organizations that enhance our market position, increase our referral base and expand the breadth of services we provide.”
LHC Group operated 284 home health services locations, 61 hospice locations, 11 community-based service locations and six long-term acute care hospitals (LTACHS) as of March 31, 2016.
Written by Amy Baxter
Companies featured in this article:
East Arkansas Health Holdings, LHC Group, PHR, Professional Healthcare Resources
