Fresh Off Latest Home Care Deal, Alpine Investors Hoping to Become ‘Anti-Private Equity Firm’

In the past couple of years, several private equity firms have been making strategic pushes to establish themselves as major players in the in-home care space. That list is headlined by Alpine Investors, which wrapped up its most recent home care investment earlier this month.

Founded in 2001, San Francisco-based Alpine Investors is a PE firm that focuses on software- and service-related investments with an enterprise value between $10 million and $300 million.

In its nearly two decades of market experience, areas of focus for Alpine have been majority- and full-buyouts of founder-owned companies, with an emphasis on people, according to Dan Sanner, a partner at the firm.

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“Our industry, probably deservedly so, has a somewhat tarnished reputation,” Sanner told Home Health Care News. “We wanted to be the anti-private equity firm. We look to partner with founder owned-and-operated businesses in two industries: software and services. And within health care, specifically home care.”

Overall, Alpine Investor has made over 110 investments since its formation, including nine in the in-home space, according to Sanner, who has helped lead successful turnaround efforts for some of those portfolio companies.

In its most recent home care deal, TEAM Services Group — a portfolio company of Alpine — purchased AmeriBest Home Care.

Philadelphia-based AmeriBest is a home care agency that provides skilled nursing and non-medical personal care services to over 1,000 clients.

For AmeriBest, the partnership with “mission-driven” Alpine and TEAM Services Group provided operational and financial support, according to CEO Omar Khanataev.

“Alpine and TEAM provided us with an opportunity to take on a partner without compromising our ability to provide home- and community-based services that help our patients lead dignified and independent lives,” Khanataev told HHCN. “Alpine and TEAM share our vision, strategy and philosophy.”

Before its purchase of AmeriBest, Alpine in May acquired Circle of Life Home Care Anishinaabe Inc., a Minneapolis, Minnesota-based home care agency that focuses on serving Native American communities.

Meanwhile, last year, Alpine Investors purchased Advantage In-Home Services, which was formerly part of St. Louis-based Advantage Nursing Services Inc., a pediatric care provider with locations in Missouri and Illinois.

Alpine Investors has primarily leaned into in-home care for its attractiveness from an investment-opportunity perspective.

However, it has also pursued home care because it’s an area that allows the firm to make a positive impact on the community level, according to Sanner.    

“Home care is a big area of focus for us,” he said. “We were recently certified as a [B Corporation], so home care is a great place where we can not only be good financial stewards of capital but also do good.” 

Certified B Corporations are businesses that meet pre-set standards of verified social and environmental performance, public transparency and legal accountability, all with the mindset of balancing profit and purpose. Other certified B Corporations, for example, include American outdoor clothing company Patagonia, which has played a vocal role as a climate change activist.

In some ways, Alpine Investor’s focus on in-home care as a part of its big-picture strategy falls in line with larger trends related to curbing U.S. health care spending.

“The cost of health care is obviously a huge conversation that is happening in society today,” Sanner said. “We believe … moving the provision of care out of the acute setting and into the home has been great in terms of bending the cost of health care, and we believe it delivers a much better outcome for patients.”

Still, working within the in-home care space has its challenges, particularly when it comes to concerns around government and payer risk.

“Alpine, along with a number of other investment firms, have gotten more comfortable with the risk of reimbursement rate cuts,” Sannner said. “We feel like we are well-positioned in a market where rates have been stable.”

Another potential challenge the firm is keeping an eye on is the requirement for electronic visit verification (EVV), which mandates that Medicaid-reimbursed providers must implement an EVV system by 2020. After some initial regulatory delays, EVV requirements kick in at the start of next year.

But Alpine has an in-house trick up its sleeve.

“One of the things that we like about what we can bring to a partnership with a founder-owned home care company is that, for those companies struggling to get electronic visit verification technology solutions in place, we actually own a company that provides this,” Sanner said. “A number of our investments use our software solution for [EVV].”

One thing that hasn’t been a challenge for Alpine has been finding quality home care assets with decent size and scale.

That has been a difficult task for other buyers, partly due to the home care industry’s highly fragmented nature and the occasional compliance-related red flag.

“We’ve had good success finding high-quality home care assets with scale. Our track record backs that,” Sanner said. “There are certainly a number of smaller providers that are facing pressure as the home care market consolidates.”

Looking toward the future, Alpine isn’t slowing down on the in-home care front. In fact, Alpine Investors is actively looking for more founder-owned businesses within the space, according to Sanner.

“As I think about our pipeline of new investment opportunities, we have a number of deals coming down the pike that we believe meet both the scale and quality threshold we look for in new investments,” he said.

Alpine knows it isn’t alone in those efforts, and the firm expects to see more consolidation in the coming months and years.

“Market by market, I would expect consolidation,” Sanner said. “Our most recent investment isAmeriBest Home Care, based in Pennsylvania. If you look at that state [alone], which just moved to a managed-care-organization structure, there are over 700 home care providers. We expect that there will be a meaningful amount of consolidation in that market and the other states we operate in.”

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