Amedisys to Acquire Evolution Health, Jump-Starting Home Health M&A Engine

Amedisys Inc. (Nasdaq: AMED) has entered into an agreement to acquire Evolution Health, a Dallas-based provider of home health, hospice and infusion therapy services.

The deal could mark a shift in Amedisys’ mindset, one that its executives said was coming. After remaining mostly quiet on the home health front of late – favoring hospice M&A instead – the Evolution deal suggests a turn in its strategy.

Evolution Health is a division of Envision Healthcare, the latter of which was previously a publicly traded company. It has a daily census of about 3,300 home health patients and employs more than 650 workers across 15 locations in Texas, Oklahoma and Ohio.


Financial terms of the deal, which is expected to close in the first half of this year, were not disclosed.

“By continuing the great care provided by Evolution Health, Amedisys will provide additional scale and resources that will expand our opportunities to care for more patients and in more communities across Texas, Oklahoma and Ohio,” Amedisys President and COO Chris Gerard said in a statement.

On its end, the Baton Rouge, Louisiana-based Amedisys delivers home health, hospice and personal care services across 528 locations in 38 states and the District of Columbia. It also delivers higher-acuity care services through its Contessa Health arm.


Once the Evolution deal is completed, it will expand Amedisys’ home health access to Medicare and Medicare Advantage enrollees significantly in both Texas and Ohio, Amedisys said in a press release.

Additionally, it will enhance the company’s co-location strategy, giving it the ability to offer home health and hospice services to six different areas across Texas, including Dallas, San Antonio and Houston.

“The purchase of Evolution Health continues our strategy to acquire and integrate high-quality regional home health assets into our home health division,” said Amedisys Chairman and CEO Paul Kusserow, who will be stepping down from his role as CEO on April 15.

While financial details of the deal were not provided, Jefferies analysts speculated that Amedisys paid around $70 million to $75 million for Evolution, according to a Wednesday note.

Given the census of Evolution, the Jefferies analysts also noted that it should add around $45 million in annualized revenues for Amedisys after the deal is finalized.

“We like the deal because it signals that Amedisys is back in the acquisition game, which should provide it a growth boost beginning in 2023,” the Jefferies analysts wrote. “We believe this deal signals an intent to reintroduce accretive M&A as a meaningful earnings contributor. Something that should, in our view, solidify Amedisys as a +15% EBITDA grower in the minds of investors once again.”

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