A New York City-based private duty home care provider has been acquired by a private equity services firm. The deal is another example of increasing interest by private equity groups in the home care space.
Caring People has been acquired by Silver Oaks Services Partners LLC, a lower middle market private equity firm focused on service businesses. Caring People was founded in 1998 and is “one of the few agencies of scale serving the private-pay market,” according to a press release from Silver Oak.
Terms of the deal were not disclosed, though Silver Oaks has acquired a majority share of Caring People, while CEO and President Steven East has maintained a significant share, East told Home Health Care News.
“It still keeps me very aligned with future growth,” East said. “I wasn’t looking to get out o the industry. The industry is just hitting its stride. There’s a nice wave ahead of us, and it was never my intent to buy out. I want to stay along for the ride.”
Caring People first acquired a home care license in New York in 2001, after the company began as domestic health services and nanny agency in East’s grandmother’s home. Since then, Caring People has grown to multiple offices in New York and New Jersey, four locations in Florida, and a newly acquired presence in Connecticut.
With Silver Oak, Caring People plans to continue expanding in both existing markets and new ones, according to East.
“We’re open to anything at this point,” East said of target acquisitions. “Whenever you find opportunity within an existing market, that provides the best returns, where you have the synergies and infrastructure in place. Within all the states we’re in, we haven’t saturated the market. There’s lots of opportunity.”
Caring People only recently entered Connecticut, with an acquisition within the last six months and another that closed only last week, according to East. While Caring People and Silver Oak will target larger acquisitions, small deals are not off the table. Providers with strong leadership teams that wish to remain part of the business are key in acquisition targets, he said.
“Our sweet spots are between $3 and $10 million [in revenue],” East said of target acquisitions. “…When we started conversing, myself and Silver Oak, I said to them, ‘you have to understand this space is primarily occupied by providers under $2 million.'”
Caring People’s revenue is above $30 million, according to East.
Caring People is the only home care company in Silver Oak’s portfolio, according to its portfolio listings on its website. The company did not respond to media inquiries as of press time.
Over the past several years, several private duty providers have been acquired by private equity firms, including Homewatch CareGivers, a major franchise company that was acquired by PNC Riverarch Capital. Other recent buyouts include franchisor ComForCare and Medicaid-focused AmeriBest Home Care, Inc.
Silver Oak was not the only private equity firm courting Caring People, East said, acknowledging the deepening interest in home care from these groups.
“We’re seeing the venture capitalists (VCs) getting involved in the home care technology, and private equity getting involved with the proven business model [in home care],” East said. “They see this fragmented industry as an opportunity to consolidate and leverage returns with proper infrastructure. That’s the focus right now.”
Written by Amy Baxter