[Updated] ‘We Own the Full Health Care Continuum’: Advocate Aurora Enterprises Acquires Senior Helpers

One of the largest home care organizations in the country has been acquired by one of the nation’s biggest health systems.

Advocate Aurora Enterprises — the recently established subsidiary of Midwest-based Advocate Aurora Health, one of the 12 largest not-for-profit, integrated health systems in the U.S. — announced Thursday it has acquired Senior Helpers. The Maryland-based Senior Helpers has more than 320 franchised and corporate-owned locations in 44 states, in addition to Canada and Australia.

Among its offerings, the home care franchise company provides meal planning, transportation and companionship services, plus assistance with personal hygiene and more. Helmed by co-founder and CEO Peter Ross, Senior Helpers has also spent years developing specialty programs for chronic neurological disease, particularly Alzheimer’s and Parkinson’s diseases.

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“This opens a lot of opportunities for us, thinking about what we can be in the broader health care continuum,” Ross told Home Health Care News. “How do you control the overall continuum? How do you own it? It’s very hard for one person, one company or one organization to have all of the parts. Well, I think we’re the first organization in the country that now can say we own the full health care continuum.”

Financial terms of the transaction were not disclosed.

With dual headquarters in Milwaukee, Wisconsin, and Downers Grove, Illinois, Advocate Aurora Health oversees 26 hospitals and more than 500 outpatient sites of care. Its workforce is made up of 75,000 overall team members, including more than 10,000 doctors and over 22,000 nurses.

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Advocate Aurora Enterprises was established toward the end of last year with a three-pronged focus on aging, parenthood and well-being.

“Each of these categories, we chose them for a couple of reasons,” Advocate Aurora Enterprises President Scott Powder told HHCN. “One, these are areas where we think there’s a lot of unmet need, a lot of growth and demand. These are also areas where we think we bring some capability from our core business of Advocate Aurora Health that can give us the ability to be effective and successful in these particular sectors.”

The Senior Helpers acquisition marks Advocate Aurora Enterprises’ second major move, with its first move being the lead investment on Foodsmart’s $25 million Series C round.

“Senior Helpers furthers our transformation into a destination health company that goes beyond sick care to provide wellness offerings,” Advocate Aurora Health President and CEO Jim Skogsbergh said in a statement. “The ultimate goal here is to give people more healthy days within the comfort of their homes doing the activities they enjoy. This aligns with our purpose of helping people live well.”

Senior Helpers was previously owned by New York-based private equity firm Altaris Capital, which acquired the home care giant in 2016 for a reported $125 million.

A major shift

Advocate Aurora Enterprises’ deal for Senior Helpers is significant for a couple of key reasons.

For starters, non-medical home care has historically been undervalued in the U.S. health care system.

Partly due to the COVD-19 pandemic, though, more attention is being paid to home- and community-based care and the need to shift care away from long-term care facilities. That notion is clearly highlighted by President Joe Biden’s American Jobs Plan, which earmarks $400 billion for expanding the country’s home-based care infrastructure.

The fact that Advocate Aurora sent its new investment arm for Senior Helpers confirms a clear change in attitudes, according to Ross.

“It’s going to be a time of change,” he said. “This won’t be the last time you see something like this. And personally, I love to be the one disrupting the industry by trying to do things that really make people’s lives better. I think this is another opportunity for us to show the value of home care, to say, ‘Look. This can all be done in the home.’”

Even if the public health emergency never happened, health systems like Advocate would likely still have embraced home care, considering America’s changing demographics.

U.S. Census Bureau statistics show that one out of every five U.S. citizens will be of retirement age by 2030, with many of those individuals in need of aging services.

“We realize there’s a whole range of things outside of medical care itself that contributes to a person’s health, wellness and well-being,” Powder said. “We want to more actively participate in that whole ecosystem, hence the creation of Advocate Aurora Enterprises, which is a vehicle to do that.”

Advocate Aurora Enterprises’ move to acquire Senior Helpers is also significant because it goes against recent dealmaking trends.

Since at least 2015, home health, hospice and home care M&A activity has been largely dominated by private equity firms, which often have the capital and motivation to outbid strategic buyers. The trend has become so pervasive that the House Ways and Means Subcommittee on Oversight even held a special hearing on it last week

“Over the last few years, I’ve been getting several calls from private equity companies that are not in the space, but want to be in the space,” Stoneridge Partners President Rich Tinsley previously told HHCN. “And that interest level is from private equity companies that are small, medium and large — it runs the whole whole gamut.”

Founded in 2002, Senior Helpers’ own transaction history has been repeatedly written by PE, Ross noted.

“This in my third process,” he said. “I would tell you that, with the first two, it was kind of just private equity, private equity, private equity. Even in this process as well, it was private equity everywhere.”

Advocate Aurora Enterprises was the only strategic in the running for Senior Helpers.

As far as a timeline, Altaris started thinking about a sale of Senior Helpers around October or September of last year, according to Ross. Altaris was naturally ready for an exit, but the timing was also strategically right because the COVID-19 pandemic put home care on a pedestal.

Senior Helpers met with a number of potential suitors, ultimately meeting with Advocate Aurora Enterprises at the J.P. Morgan Health Care Conference. From the very beginning of those talks, it seemed like a perfect match, Ross said.

“There was a lot of high demand throughout the process, which was a very competitive one,” he said. “We felt Advocate really shined, and we came away just very impressed.”

Advocate Aurora Enterprises was likewise impressed by Senior Helpers, said Powder, specifically pointing to its leadership team, scale and proven track record of retaining caregivers.

“We know it’s a people business and that you’ve got to have great caregivers.” he said. “This is a tough business to recruit and retain. Senior Helpers has great caregivers. It seems like Peter and his team have done a great job with that. We also love their footprint.”

While there are no publicly available financial details, it’s safe to say that Altaris got substantially more than the $125 million it paid for Senior Helpers in 2016.

“[An] important thesis for us was, we do believe that the home should be the care delivery platform of the future, or the focal point for care delivery,” Powder said. “We obviously have done a lot already in that regard. That’s not necessarily why we like Senior Helpers specifically, but more on why we like this particular sector that’s complementary to what we do today. But obviously Senior Helpers, to me, is one of the stars in that space.”

‘No change’ for franchise owners

Nothing will structurally change as a result of the acquisition for current Senior Helpers franchisees, according to Ross.

Owners will continue to receive the same support from the Senior Helpers corporate resource center and the company’s leadership team, with all executives remaining in place.

The biggest difference will be the new capabilities and skill sets that Senior Helpers locations now have access to, thanks to Advocate Aurora Health.

“We now have access to thousands of clinicians,” said Ross, who remains CEO. “We never had that before. We now have access to 24/7 clinician call centers. We have access to telemedicine. In the markets where we overlap, it provides great opportunities and synergies.”

Additionally, Senior Helpers will remain just as dedicated to growing the franchise moving forward.

“We actually offered and awarded three franchises in the last week before the deal was announced,” Ross said. “So we are growing franchises significantly across the country and will continue to do so.”

The Senior Helpers Town Square franchising business — jointly owned by Altaris and Ross — was not part of the Advocate Aurora Enterprises purchase.

“It will still have a relationship with Senior Helpers, per our staffing agreement,” the CEO said. “Senior Helpers will still staff the town square locations as they get built. But that’s still a very, very viable model and brand.”

Livingstone acted as the exclusive financial advisor to Advocate Aurora Enterprises in the acquisition.

Cain Brothers, a division of KeyBanc Capital Markets, acted as a lead financial advisor to Senior Helpers.

“As demand for non-medical home care services is expected to remain robust for the next decade, and these services become a much larger and more critical piece of the broader care continuum, we anticipate strong continued interest,” Jim Moskal, a Partner at Livingstone, said in a statement . “[And the] overall industry outlook remains favorable.” 

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