LHC Group Teams Up with Geisinger for Second Joint Venture of 2019

LHC Group Inc. (Nasdaq: LHCG) announced Tuesday it has entered into a definitive joint venture agreement with Geisinger Home Health and Hospice, plus AtlantiCare Home Health and Hospice.

The announcement marks the second new joint venture for the Lafayette, Louisiana-based LHC Group in the early going of 2019.

Under the new JV agreement, LHC Group will team up with Geisinger to enhance home health and hospice services at its Pennsylvania locations. It will do the same at AtlantiCare, an affiliate of Geisinger based out of Atlantic County, New Jersey.

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The joint venture agreement is expected to be completed by April 1 for Geisinger’s Pennsylvania locations and by June 1 for the New Jersey locations, according to LHC Group. Once finalized, LHC Group will take majority ownership of Geisinger’s home health and hospice services, while also assuming management responsibility.

“As is customary with all our joint venture partnerships, we have been working for months to plan and prepare, and will continue as we welcome, onboard, and fully transition our new family members from Geisinger on April 1 in Pennsylvania and on June 1 in New Jersey,” an LHC Group spokesperson told Home Health Care News. “Integration and adoption of LHC Group’s policies, procedures, and best practices — all aimed at providing exceptional patient care and satisfaction — will continue after closing and throughout 2019.”

Currently, LHC Group has 24 home health and six hospice locations in Pennslyvania. The company has eight home health and one hospice location in New Jersey.

Upon closing, the JV with Geisinger and AtlantiCare will add a combined 13 new home health and hospice locations to LHC Group’s footprint.

More of the same

LHC Group expects annualized revenue from the newly announced JV of about $35 million, which will not materially affect its 2019 diluted earnings per share, according to the company.

With a relatively low-leveraged balance sheet and increasing free cash flow, LHC Group expects more of the same in terms of JVs and other acquisitions throughout the next several months.

“Our acquisition pipeline is robust, and we continue to review 15 to 20 highly vetted transactions at any given time,” the LHC Group spokesperson said, noting that the company targets between $100 million to $150 million in acquisitions each year.

Joint ventures have been a major part of LHC Group’s business strategy. Currently, the company is the in-home health care services and JV partner of 340 hospitals across the country.

LHC Group closed on a JV partnership with Unity Health on Jan. 31, announcing the purchase and shared ownership of two home health providers in Arkansas.

A month earlier, the company announced it had expanded its partnership with LifePoint Health through the purchase and shared ownership of home health service providers in North Carolina and Virginia.

In less than two years, the LifePoint joint venture has grown to include 33 home health locations, 14 hospice locations and one home- and community-based services locations.

As a health services organization, Geisinger serves more than 1.5 million total patients in Pennsylvania and New Jersey. The system includes 13 hospital campuses, a nearly 600,000-member health plan, two research centers and the Geisinger Commonwealth School of Medicine.

AtlantiCare is an integrated system of services. It includes AtlantiCare Regional Medical Center, AtlantiCare Health Engagement, the AtlantiCare Foundation and AtlantiCare Health Services.

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