Homewatch International, franchisor of Homewatch CareGivers, is the latest home care company with new private equity ownership.
Authority Brands, a portfolio company of PNC Riverarch Capital, has acquired Homewatch International, according to a press release issued Thursday. There are more than 200 Homewatch CareGivers locations across the United States, Canada, and Latin America, providing in-home services such as elder care, after-surgery care, and prenatal/postnatal care.
The acquisition price was not disclosed.
Authority Brands also owns house cleaning franchisor The Cleaning Authority. PNC Riverarch Capital is a middle-market private equity firm that is an affiliate of the PNC Financial Services Group.
“This acquisition will take Homewatch CareGivers to the next phase of growth as we endeavor to improve our market share and strengthen our positioning within the continuum of care,” CEO Julie R. Smith stated in the press release.
Private equity targets franchisors
Private equity has been especially active in acquiring home care franchisor companies for several reasons, according to Jim Moskal, head of the health care practice at Chicago-based Livingstone Partners, which was the exclusive financial advisor to Homewatch CareGivers on this transaction.
“There’s been very strong interest from private equity firms in the sector, because it’s a way to play the demographic trends that are happening in this country (aging baby boomers, people living longer), and you’re able to play those trends with pretty minimal regulatory burden … and pretty minimal government reimbursement risk,” Moskal said Thursday at the Home Health Care News Summit in Chicago.
In addition, franchisors often have high margins in the 30%-50% EBITDA range, and have some insulation from operational challenges such as staff recruitment and retention, he added.
There was “robust interest” in Homewatch CareGivers from private equity firms, Moskal said in the press release.
Written by Tim Mullaney