Addus HomeCare Corporation (Nasdaq: ADUS) announced Wednesday it has reached a definitive agreement to acquire an Ohio hospice provider for $192 million.
Specifically, the deal is for Queen City Hospice and its affiliate, Miracle City Hospice. The $192 million represents $162.8 million of value, net of the present value of $29.2 million in estimated tax benefits, according to Addus.
The Queen City Hospice acquisition, along with two other closed acquisitions in 2020, brings Addus’ total acquired annualized revenues to about $82 million. Addus expects the transaction to be “immediately accretive” to its financial results.
Frisco, Texas-based Addus provides home care services to about 44,000 consumers through 214 locations across 25 states, while also offering home health and hospice care. The vast majority of its revenue comes from personal care services, however, which makes this investment into the hospice space all that more significant.
“We are very pleased to announce our agreement to acquire Queen City Hospice, a leading provider of hospice services in the state of Ohio,” Dirk Allison, the president and CEO of Addus, said in a press release. “This proposed acquisition is aligned with our strategy of providing hospice and home health care in markets where we already have a significant personal care presence. With this acquisition, Ohio becomes the second state where we have the capability to provide all three levels of home care.”
Addus already has eight home care locations in Ohio.
On its end, the PE-backed, Queen City Hospice operates in the major Ohio markets of Columbus and Dayton. The end-of-life care operator also operates in Cincinnati, where it is based.
The company’s network includes an average daily census of about 900 patients and 600 employees. It has annualized revenues of about $56 million, according to Addus.
“We look forward to working with the experienced operational leadership team at Queen City Hospice and its clinical staff of over 600 employees,” Allison said. “Importantly, we share the same dedication to patient-centered hospice services that allow consumers to receive quality, compassionate care in their homes. We believe this acquisition is a great strategic fit for Addus, and we look forward to the additional opportunities for growth through our combined operations.”
The acquisition marks the start of a strategy for Addus that will be characterized by bolstering its home health and hospice services in markets where it already has a personal care services presence.
It also adds additional fuel to what has been a red-hot M&A fire in recent weeks.
“Acquisitions have been and remain an important part of our growth strategy at Addus,” Allison said. “While our approach to acquisitions has emphasized appropriate caution and additional diligence through the early phase of the COVID-19 pandemic, we are now fully engaged in the process of identifying and pursuing acquisition opportunities in each of our three operating segments.”