The Pennant Group Inc. (Nasdaq: PNTG) announced Wednesday that it has purchased two home health agencies with multiple locations throughout southeastern Idaho and northern Utah. The financial terms of the deal were not disclosed.
The Pennant Group came to fruition last year, a spinoff of the Ensign Group (Nasdaq: ENSG). Before the newly announced deal, Pennant’s portfolio included 65 home health and hospice agencies, plus 53 senior living communities across 14 states.
Headquartered in Eagle, Idaho, Pennant acquired the assets of two home health agencies from Signature Healthcare at Home, a Wilsonville, Oregon-based home care, home health, palliative care, primary care and hospice provider.
The deal is The Pennant Group’s first home health transaction since January.
“We are excited about the acquisition because it gives us the opportunity to expand our relationships with patients, referral sources, and payers in communities all across eastern Idaho and northern Utah,” John J. Gochnour, chief operating officer of The Pennant Group, told Home Health Care News in an email. “These agencies have long been an important part of the post-acute care continuum in these areas, and we are excited to add to that legacy as our local leaders drive extraordinary clinical, cultural and community results through our innovative operating model.”
Additionally, the company acquired the assets of two hospice providers from Signature Healthcare at Home as a part of the same transaction.
“We are pleased to be entrusted with these agencies to further the excellent care these local teams provide to patients and their families,” Daniel Walker, Pennant’s CEO, said in a press release. “This off-market acquisition is further evidence our cluster-driven disciplined growth strategy enables us to execute on multiple transactions across different markets through various regulatory and operating environments.”
The offices in both Idaho and Utah will operate under the name: Symbii Home Health and Hospice.
The company partnered with Signature Healthcare at Home on a prior transaction when The Pennant Group acquired its Afton, Wyoming location in 2018.
During the Pennant Group’s first-quarter 2020 earnings call in May, the company’s leadership expressed that COVID-19-related disruption could be a potential growth opportunity in the upcoming months.
“Through the pandemic, we continue to maintain a robust pipeline of acquisition opportunities,” Derek Bunker, the company’s chief investment officer, said on the call. “We understand that some investments with the highest returns are executed during periods of disruption. So an important part of our pandemic response was improving our cash position and revolver availability to be ready to move quickly for the right opportunities.”
At the time, Bunker stated that the impact of the public health emergency could leave the door open for consolidation within the industry.
“We think that there are many more opportunities for consolidation as pandemic headwinds persist and disproportionately affect some operators that will be looking for the right strategic buyer,” Bunker said.
On Tuesday, Walker reiterated that the company will continue to strategically pursue home health and hospice deals.
In general, the health care M&A market has seen a slight downturn in Q2.
So far, there have been 304 health care related transactions — a 24% decrease from the last quarter, according to data from Deal Search Online.
Overall, there have been nine home health and hospice transactions in Q2.