How VitalCaring, New Day Healthcare Plan To Reach The ‘Sweet Spot’ Of Scale

Internal and external headwinds have conjoined to curtail dealmaking in home-based care over the last couple of years. Amid those headwinds, however, there are companies like New Day Healthcare and VitalCaring that are banking on big-time growth in 2024 and 2025, largely driven by acquisition.

As growing providers, each company has picked up what they believe to be the right assets, at the right time, over the last couple of years.

Now, their leaders are expecting seller expectations to finally normalize on a greater scale in 2024, paving the way for accelerated growth.


While New Day Healthcare has been quite acquisitive since it launched in 2020, VitalCaring – led by April Anthony – has been laying down the groundwork of its venture before really zeroing in on major acquisition targets.

“It took a lot just to come together, to rebrand, to get everyone on one system,” VitalCaring President Luke James said last month at Home Health Care News’ Capital + Strategy event. “All of that was really what I’ll call the foundation laying. And it’s really hard to feel confident about doing a lot of deals, or a big deal, when you’re laying on top of a foundation you don’t feel is really settled yet.”

VitalCaring President Luke James speaks at HHCN’s Capital + Strategy conference.

Backed by Anthony herself, The Vistria Group and Nautic Partners, the Dallas-based VitalCaring is a home health and hospice provider with around 60 locations across Texas, Oklahoma, Louisiana, Mississippi, Alabama and Florida.


With its foundation built, James and VitalCaring have the confidence to begin layering on top of it in 2024 and beyond.

Similarly, New Day Healthcare has been establishing a footprint as an emerging, up-and-coming home health, home care and hospice provider since its founding in early 2020. While it has already completed at least nine acquisitions, the company also now has a basic foundation it feels confident building upon in a more major way.

In essence, it – like VitalCaring – is primed for some more big-game hunting in 2024.

“We have a good base to build off of now, you want to make sure that base is stable,” New Day Healthcare CEO G. Scott Herman also said at Capital + Strategy. “You’ve got to have your business intelligence in place for your ability to scale and grow, in an industrialized process. We’ve got that now. So we feel like we can be more aggressive in both scale and numbers of acquisitions now over the next year or two years.”

Also based in Texas and backed by Kaltroco, New Day has about 30 locations across Texas, Missouri, Kansas and Illinois. It serves nearly 110,000 patients annually and has about 7,000 team members.

Its service line base is personal care, which Herman feels is a good bedrock for a home-based care continuum. He also thinks five or six more deals in 2024 is a reasonable expectation for the company.

Getting to that ‘sweet spot’

Over the last few years, home health lifers have made note of the fact that there are less founder-run businesses in the mid- to large-sized market range.

VitalCaring, for one, is trying to fill that void.

“If you think about five years ago, you had all these founder-owned, founder-ran businesses,” Anthony, VitalCaring’s CEO, told HHCN last year. “The people who were around the table leading home health businesses were lifers. They were people who were passionate about home health care. Now, that’s not necessarily [the case]. There’s this void in the market that I’m super excited about stepping into. We have the opportunity to bring the heart back to home health care.”

With that in mind, both New Day and VitalCaring leaders see an opportunity to grow into a “sweet spot” – a place where there’s considerable scale behind them, but not necessarily a nationwide, public market-type footprint.

“We’re not looking to build a billion-dollar company, we’re looking to build something in that sweet spot for home care,” Herman said. “$300 million to $500 million in revenue, that’s perfect. You can still touch the company, you still reach things. A billion dollar company? What the heck are you going to do with that? It’s a mess.”

VitalCaring may have aspirations above that $500 million revenue mark, but plans to stay within a specific geography – at least for now.

A lot of states may make sense to enter into at some point for the company, but its near-term strategy is to grow contiguously from the Southeast states it is in right now.

For New Day, Herman said the first must-have when looking at a seller is culture alignment. The company is looking for solid leadership, stability and consistency, and is not interested in fixer-uppers.

James went deeper on that front, saying that part of the focus around VitalCaring’s growth right now is talent acquisition.

“We’re not at a point yet where we feel like we have all the talent we need,” James said. “When we’re looking at deals that have real go-getters within, talented people that have a seat at the table within the organization – that adds a lot of value.”

What a seller needs to look like

Culture, scale and geography are starting points for attractive assets, in James’ and Herman’s eyes.

Beneath that, there’s plenty more layers.

For VitalCaring, its leaders are uninterested in assets reliant on one specific thing – whatever it may be – to be successful.

“They have to be well rounded,” James said. “We’re going to say no pretty quickly if there’s a high level of referral source concentration, or if 80% of their admissions are coming in from one or two sales reps that are either going to hold you hostage because they can, or where you’ve got turnover risk if they leave. Then you’re losing a lot of the value that you just paid a lot of money for. … We want strong organic growth and a good payer mix.”

On New Day’s end, it’s also taking a closer look at compliance.

New Day Healthcare CEO G. Scott Herman speaks at HHCN’s Capital + Strategy conference

“If we don’t have a clear line of sight to resolution of compliance issues, we don’t do it,” Herman said. “Then we’ll jump into financial performance, which is where we assess the diversity of the business. The more diverse the business, and the more stable the payers that are feeding that business, the more we like it.”

Outside investors may see home-based care as an opportunity for long-term growth, but perhaps just not now. Even inside operators may see the present market as a poor time to grow.

Herman and James see things differently, with multiples coming down from 2020 and 2021 highs.

“If you have a long-term vision, and your sponsors aren’t looking to exit tomorrow, then you’ve got the patience to be able to buy when it’s tough and be really well positioned when they’re looking to exit,” James said.

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