Arosa+LivHome continues to ride its fast-paced M&A wave into 2020. The company announced Tuesday that it has acquired Lifecare Innovations, a Burr Ridge, Illinois-based professional care management services provider.
Financial terms of the deal were not disclosed.
Backed by Bain Capital Double Impact, Arosa+LivHome was formed in October 2018 after the combination of two regional health care companies: Arosa and LivHome. The provider operates in California, Florida, Illinois, North Carolina, Tennessee and Texas.
Tuesday’s move expands Arosa+LivHome’s Illinois footprint. It also makes the PE-backed company the largest employer of care management professionals in the U.S., significantly widening its lead nationally, Ari Medoff, CEO of Arosa+LivHome, told Home Health Care News.
In general, care management services provide families with one-on-one access to expert guidance to better manage disability, disease and age-related vulnerabilities, which can often be daunting, according to Medoff. Care management is especially impactful when paired with traditional in-home care services as well.
“Imagine a son or daughter who has been through this [aging] experience 500 times with parents and understands the way that the system works, knows what questions to ask, knows how to connect to different resources and knows how to communicate with different family members who may not be on the same page about decisions that have to be made,” Medoff said. “That is what our care managers do.”
Arosa+LivHome has consistently thrown its weight behind care management and believes that, in the coming year, the industry will grow in importance and prominence.
“Since the merger of Arosa and LivHome in 2018, we have bought businesses that have care management and home care, as well as standalone care management businesses,” Medoff said. “We understand the value [care management] brings to families when a care manager is involved, and the support and satisfaction it provides to our caregivers.”
Arosa+LivHome has been busy on the M&A front since 2018 — acquiring eight companies in total. Currently, the company’s portfolio includes 24 individual offices.
Most recently, the company purchased LifeLinks, a care management provider that operates in Raleigh, North Carolina, and Nashville, Tennessee.
As for what made Lifecare Innovations, in particular, an attractive acquisition asset, Medoff points to the company’s 25-year track record, as well as its current leadership team.
“They are one of the largest care management companies in the country, with a unique team-based management approach,” he said. “Every client knows at least two of their care managers. They have an outstanding leadership team that we are really pleased to welcome on board, including Lauren Sherman.”
Sherman currently serves as Lifecare Innovations’ president.
Overall, the gross margins on care management are lower than in traditional home care. But there is also less support needed, according to Medoff.
“When we think about in terms of net margins from that service line, it is probably overall comparably to home care,” he said. “The most important thing for us is that we believe deeply in this model of delivering both at the same time. That is our biggest differentiator from the 40,000 other home care companies that there are in the country — our model of team-based care management and home care together.”
Bain Capital Double Impact is the impact investing strategy of Bain Capital, a leading global private investment firm. Other Bain Capital Double Impact portfolio companies include by CHLOE., a fast-casual restaurant concept, and HealthDrive, a specialty provider of on-site dentistry, optometry and other services to long-term care residents.
Medoff — a Wall Street veteran with stints at Lehman Brothers and Goldman Sachs on his resume — isn’t the only in-home care executive that’s bullish on care management.
Jericho, New York-based AMR Care Group has become one of the fastest-growing home care companies around, largely due to its core care management offering. AMR Care Group has grown by roughly 97% over the past three years, with a 2018 revenue of about $2.2 million.
Its CEO, Anne Markowitz Recht, believes care management will play a critical part in home care expansion in 2020.
“There will be more consolidation of home care companies, with smaller companies being bought out or going out of business,” she told HHCN in December. “Regulations and enforcement, especially involving labor, has already affected the mom-and-pop shops. Care management, on some level, will also increasingly be part of larger home care companies’ service mix.”
Globally, the care management solutions market is projected to be worth $19.28 billion by 2023, according to research firm MarketsandMarkets.