Care Advantage announced at the end of December that it acquired Team Nurse Inc.
The acquisition may be new, but the relationship between the two companies is actually quite old.
South Boston, Virginia-based Team Nurse, which operates across 17 locations in Virginia, was founded in 2000 after owner Steve Mize originally purchased two locations from Care Advantage, a provider of both non-medical and medical home health care services. As a result of December’s deal, Team Nurse rejoins the Care Advantage family at a time when the company continues to expand its footprint in the Mid-Atlantic area.
Strategically, the existing ties between the two providers made the acquisition an easier choice for Care Advantage, CEO Tim Hanold told Home Health Care News.
With the Team Nurse acquisition, Care Advantage now has over 40 locations in its network.
“It’s kind of like the family circling back together,” Hanold said. “But certainly, both sides of the family have grown substantially over the course of those two decades. We’re cut from the same DNA when it comes to a culture of caring.”
Hanold declined to comment on the terms of the Team Nurse acquisition.
Overall, Care Advantage has made four acquisitions in 2019, with the Team Nurse move standing as one of the biggest. By acquiring Team Nurse, Care Advantage fills out a great enough portion of the region to make it the largest privately-owned home health company in the Mid-Atlantic, according to Hanold.
The company’s footprint now covers 90% of both the geography and population of Virginia, for example.
Care Advantage is a BelHealth Investment Partners portfolio company. BelHealth is a health care private equity firm focused on lower middle-market companies.
The acquisitive nature of Care Advantage in the last year will continue into 2020, according to Hanold, who expects to increase his company’s number of acquisitions as it takes advantage of industry tailwinds. The goal will be to further expand in 2020, but Care Advantage will still look for deals on an opportunistic basis.
The Patient-Driven Groupings Model (PDGM) could be a catalyst for those opportunities to surface. Whether it’s because of PDGM or another industry headwind, Hanold believes that some of the smaller home health companies — those in the $2 to $3 million range — will likely become available.
If small- and medium-sized businesses are looking to sell, that will give Care Advantage the chance to act fast. Several large, national home health providers have echoed similar plans.
“There are going to be a number of quality companies out there … that are going to come up — and they’re going to come up early,” Hanold said. “We already have a very robust pipeline that has been forming just over the last 90 days, and that’s with the consideration of what’s happening just around the corner next week.”
PDGM officially went live on Jan. 1.
Care Advantage is a diverse provider that considers itself a population health-type company. As such, its options when acquiring can be broader in terms of what kind of work the prospective companies do — and how they get paid.
“Whether it’s Medicare, Medicaid or private duty, we are essentially taking care of the entire swath of the population of the Mid-Atlantic area,” Hanold said. “When we’re looking at acquisitions, we’re looking at other families joining ours, and whether they match up with the same type of passion in providing a great experience for our patients and a great experience for our caregivers.”
Based on Care Advantage’s growth model and the coming headwinds, it probably won’t take long to find out what its next move is.
