SYNERGY HomeCare, a franchisor with about 300 locations nationwide, has been sold to private equity firm NexPhase Capital for an undisclosed sum.
Gilbert, Arizona-based SYNERGY offers a range of non-medical personal care to seniors, as well as clients with developmental or physical disabilities, and people recovering from surgery or illness.
“We very much look forward to our partnership with NexPhase, and, as an entrepreneur, I believe we found everything we were looking for in a partner,” SYNERGY founder and CEO Peter Tourian said in a press release issued Thursday.
Based in New York City, NexPhase focuses on lower middle-market growth-oriented companies, with typical investments ranging between $25 million and $75 million. Other health care companies in its portfolio include pain management company Clearway Pain Solutions and revenue cycle management provider Meduit.
Livingstone, a mid-market M&A and debt advisory firm based in Chicago, advised SYNERGY in the transaction. It’s the latest in a long list of recent acquisitions involving private equity investing in a personal care franchisor; Livingstone was involved in several other deals, such as the sale of Homewatch CareGivers to PNC Riverarch and the sale of Home Helpers to Linsalata Capital Partners.
Expect even more interest in franchise-based home care providers going forward, Livingstone Partner Jim Moskal told Home Health Care News.
The trend has been driven by the undeniable demographics, with the massive baby boom generation aging in the coming decade. In addition, non-medical personal care has been gaining ever-increasing luster as health care payors see its potential for keeping people healthier for longer periods of time, keeping costs in check by reducing hospitalizations.
With Medicare Advantage plans now allowed to offer non-medical home care as a benefit, expect even more interest on the part of private equity and other buyers, Moskal said.
The MA change could also make some providers more interested in partnering with private equity, as they seek capital to expand their footprint and invest in new technological capabilities. Medicare Advantage plans typically like to partner with providers that can collect and share data on their outcomes, and that also have the scale to serve large patient populations.
“You see that on the skilled [home health] side, and on the non-medical side, no doubt Medicare Advantage wants to deal with sophisticated providers,” Moskal surmised.
That said, the large national Medicare Advantage providers like UnitedHealthcare and Humana are not the only players—there are also regional payors with smaller service areas, he noted.
There are a lot of questions still to be answered about how the new MA policy will play out, but it should help keep the mergers and acquisitions market humming along.
“Going forward, it’ll stoke interest,” Moskal said.
Written by Tim Mullaney