LHC Group Inc. (Nasdaq: LHCG) announced Monday it has agreed to purchase Arizona-based East Valley Hospice and East Valley Palliative Care. The deal is expected to close on Jan. 1.
Mesa, Arizona-based East Valley Hospice and East Valley Palliative care provide at-home care for end-of-life patients as well as ones living with complex conditions. Together, they offer services to patients in Mesa, Phoenix and dozens of surrounding communities.
Both providers will continue to operate under the East Valley Hospice and East Valley Palliative Care names, respectively.
“We look forward to welcoming the teams at East Valley to our LHC Group family of providers,” LHC Group Chairman and CEO Keith Myers said in a statement. “We share a mission and vision to provide high-quality, in-home service to those who place their trust in us. Together, we will be able to bring hospice and palliative care to even more patients and families in Mesa and the surrounding Phoenix metro area.”
On its end, LHC Group offers home health, hospice and personal care services to patients in 35 states and Washington, D.C. LHC Group operates more than 110 hospice locations around the nation.
The Lafayette, Louisiana-based company expects $4.8 million of annualized revenue from the purchase, with the move expanding its footprint and service diversity in the greater Phoenix area.
Strategically, the acquisition is part of LHC Group’s goal of locating multiple in-home health care services in markets where there is an identified need. The company — like most others — has been especially active around hospice and end-of-life care over the past couple of years.
LHC Group already has a well-established and sizable home health agency in the Phoenix market that operates under the brand “At Home Healthcare.”
On a Q3 earnings call last week, LHC Group executives were openly optimistic about the company’s M&A capabilities for the rest of the year and the beginning of 2021.
In October, the company finalized an expansion of its joint venture with Irving, Texas-based Christus Health to enhance hospice services in that market.
The company believes its success dealing with the current COVID-19-impacted landscape has helped it the M&A arena.
“It’s having a positive impact not only on organic growth, but also on our M&A pipeline as we are extending current joint ventures and reviewing an increasing number of inbound requests for new partnerships to fulfill similar needs,” LHC Group President Joshua Proffitt said on the call.
The company also completed joint ventures in Florida, Georgia, Colorado and South Carolina in recent months.
“We believe that this recent activity will continue to gain momentum with increased M&A and continued strong organic growth trends in Q4 of 2021,” Myers said during the call.
Many home health insiders expected historic consolidation due to the Patient-Driven Groupings Model (PDGM) at some point during 2020. LHC Group still believes that is coming, or already underway, with COVID-19’s impact adding to it.
“We anticipate a historic consolidation opportunity in home health, and are seeing an increasing number of hospice opportunities in our pipeline,” Myers said. “We believe we are well positioned for a strong finish in 2020 and a strong start in 2021.”