HCAP Partners Invests in Mission Healthcare, Nova Leap Completes Home Care Acquisition

HCAP Partners invests in Mission Healthcare

In the midst of growing interest in the home health care space from private equity investors, HCAP Partners has invested in Mission Healthcare. Investment terms were not disclosed.

Mission Healthcare — which has more than 600 employees — is a San Diego-based home health and hospice services provider with 10 locations serving the Southern California region.

Also based in San Diego, HCAP Partners is a private equity firm that caters to lower-middle market companies throughout California and the greater West Coast area. The firm typically invests between $2 million and $10 million in established businesses that generate between $10 million and $75 million in revenues.

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“Mission Healthcare is poised for growth and has significant upside for expansion in both its home health and hospice services,” HCAP Partners principal and Mission Healthcare board of directors member Nicolas Lopez said in a press release announcing the news. “Under the leadership of new CEO Paul Ver Hoeve II, the company is well-positioned to scale operations and drive performance improvement.”

In general, HCAP’s investment into Mission Healthcare further reflects the broader private equity interest that the home health, hospice and personal care spaces have seen over the past few years.

From 2017 to 2018, there was a “pretty significant jump in private equity interest,” Cory Mertz, managing partner at M&A advisory firm Mertz Taggart, told Home Health Care News.

A number of factors are behind that spike, he said. For example, private equity groups are sitting on a record amount of cash available for transactions and investment. As a result, there is an overall increase in the demand for quality companies.

When it comes to transactions, in particular, private equity groups have the ability to spend more due to PE deal valuations generally falling below public company valuations.

“Within home health, home care and hospice, If you look at the valuations for Amedisys (Nasdaq: AMED), LHC Group (Nasdaq: LHCG) and Addus (Nasdaq: ADUS), they have all climbed significantly over the past 15 months, starting in early 2018,” Mertz said. “This generally gives the private equity groups the ability to spend more on their transactions.”

Additionally, private equity groups are beginning to see the value that providing care in the home, in a coordinated way, adds to the overall health care ecosystem, Merts said. Other groups are following suit as well.

In total, 2018 saw 33 add-on and 22 platform transactions from private equity groups interested in home health, home care and hospice, a leap from 26 add-on and 10 platform transactions in 2017.

Nova Leap continues expansion

Nova Leap Health Corp. (TSXV: NLH), an international provider of personal home care and support services, has completed its acquisition of the business assets of Careforce Home Care Workers Cooperative Limited.

Careforce is a Canada-based private home health care agency and worker cooperative that provides housekeeping services, post-surgical assistance and home nursing visits, with locations in Kentville and New Glasgow, Nova Scotia.

Nova Scotia-based Nova Leap has been rapidly growing in Canada, in addition to building a solid footprint in the United States. Among its U.S. locations, Nova Leap has operations in Vermont, New Hampshire, Rhode Island and Massachusetts.

Last October, the company completed its acquisition of New Hampshire-based Living at Home SeniorCare, after making several other deals in New England earlier that year.

“We are excited to welcome the Careforce team to our organization,” Nova Leap President and CEO Chris Dobbin said in a press release announcing the closing. “This is another important investment in line with our 2019 expansion plans in the U.S. and Canada.”

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