Less than a month into 2019, it’s already safe to say private equity’s interest in home care opportunities likely won’t slow down in the new year.
On Wednesday, PE-backed Simplura Health Group closed on its acquisition of Personal In-Home Services, propelling Simplura into the West Virginia market and expanding its footprint to six states in total. Simplura Health Group — a rapidly growing family of home-based care entities — is a portfolio company of New York-based middle-market PE firm One Equity Partners.
Financial terms of the deal were not disclosed.
“This transaction leverages our strengths to serve the elderly where the demand for high-quality residential care is exceptionally strong,” David Middleton, president and CEO of Simplura, said in a statement. “West Virginia’s senior population is expected to age at a faster rate than the rest of the U.S. and to grow substantially over the next two decades.”
Headquartered in Wheeling, West Virginia, Personal In-Home Service’s subsidiaries include Panhandle Support Services and Select Home Support. Personal In-Home Service’s subsidiaries will continue to operate under their existing brands, according to Simplura, which also operates in New York, New Jersey, Florida, Pennsylvania and Massachusetts.
Personal In-Home Services is the seventh acquisition Simplura has made under One Equity Partners’ ownership.
Adults age 65 and over make up slightly less than 20% of West Virginia’s overall population, according to the U.S. Census Bureau.
Private equity stays active
In addition to Personal In-Home Services, Simplura’s other recent acquisitions include Helping Hand in August 2018, Keystone In-Home Care in May 2018 and SarahCare of Jenkintown in February 2018. The name “Simplura” is derived from a Latin phrase for “better together.”
One Equity Partners’ growth push for Simplura largely mirrors the broader, industry-wide PE interest in the post-acute care segment, most notably in the hospice, home health and home care spaces. Of the four home health and hospice deals that have been announced since Jan. 1, at least three have been from private equity sponsors, according to recent data from M&A intelligence firm Irving Levin & Associates.
Hospice interest from PE groups, in particular, has been high.
Currently, One Equity Partners has more than $5 billion in assets under management. Its other unrealized health care assets include Ernest Health, a provider of post-acute health care services with 18 in-patient rehabilitation facilities and seven long-term acute-care hospitals.
In the entire health care sector, private equity firms closed 487 health care deals in the first three quarters of 2018, according to a recently released annual report from PricewaterhouseCoopers’ (PwC) Health Research Institute. The total is more than double the number of deals PE firms closed a decade earlier.
PE groups have invested in health care for years, PwC points out, but now their pace is quickening as they look to build better business models by consolidating the highly fragmented home care industry.
Bain Capital Double Impact and its Arosa+LivHome platform is one example of that trend.