Addus HomeCare Corporation (Nasdaq: ADUS) announced Wednesday that it has named a new EVP and chief development officer in Cliff Blessing, who had previously served as the EVP of corporate development for Encompass Health’s (NYSE: EHC) home health and hospice business.
The move appears to reflect an aggressive M&A strategy for Addus, which was highlighted in CEO and Chairman Dirk Allison’s comments on the hire.
“We are delighted to welcome Cliff to our senior management team in this important new senior executive role at Addus,” Allison said in a statement. “His previous experience in sourcing and completing strategic acquisitions and strong working knowledge of the skilled home health business will bolster our ongoing acquisition and development efforts.”
During his time at Encompass, Blessing oversaw home health and hospice M&A. His former company is still undergoing the process of spinning off its home health and hospice business into its own entity.
Soon to be Enhabit Home Health & Hospice, the Encompass home health and hospice business is one of the largest providers of those two services in the country. Meanwhile, Addus is mostly known for Medicaid-based personal care services, but it has increasingly voiced its eagerness to get further into home health care and hospice.
“We continue to see strong volume growth in this segment,” Allison said of the company’s home health segment in February. “Since the beginning of 2021, our home health admissions have increased steadily, with overall favorable trends continuing for most of the fourth quarter, as we have been seeing over the past year. We are excited about our home health operation and we’ll continue to focus our efforts on expanding these services.”
Addus currently provides home-based care services to approximately 44,500 consumers through 207 locations across 22 states.
For context, last year, personal care accounted for 79% of Addus’ revenue. Meanwhile, home health and hospice accounted for about 3% and 18%, respectively.
But the company wants to build out each of those service lines across its footprint.
At the end of last year, the company acquired Summit Home Health, based in Chicago, an area that contains one of its largest personal care footprints. Then, it acquired the Illinois-based hospice and palliative care provider JourneyCare for $85 million in January.
“As we continue to expand our service offerings in all three levels of home care, acquisitions remain an integral part of our broader growth strategy,” Allison said. “Our development team has a strong record of success, and we look forward to continued growth under Cliff’s leadership. We have a solid pipeline of acquisition opportunities, and we are confident we will benefit from his expertise as we extend our market reach and further strengthen our competitive position.”
With Blessing on board, Addus now has a leader that knows his way around the home health and hospice spaces.
“[Addus] appears to be gearing up to drive an active M&A agenda in the years to come as it has created a new EVP-level senior management position of chief development officer,” Stephens analyst Scott Fidel wrote in a note.
Addus has likewise reported a more favorable staffing environment of late, which had previously been a major pain point in the early stages of 2021.
Part of that could be due to inflation. Though inflation has mostly hurt providers in all the company’s service lines – home care, home health and hospice – it could also be expanding its worker pool.
“Anecdotally, we have heard from multiple health care providers, including some who employ personal caregivers, that the labor market has shown signs of improvement in recent weeks, particularly as the uptick in inflation has caused pressure on potential employees’ personal finances that is prompting them to either go back to the workforce or work more hours,” a recent note from the investment group Jefferies said.
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