Addus HomeCare Corp. (Nasdaq: ADUS) has completed its acquisition of Gentiva’s personal care assets. The deal will significantly bolster Addus’ footprint in certain states, and also allow the company to enter other states for the first time.
In a press release, Addus noted that the $350 million deal was funded through a combination of cash on hand and the company’s existing revolving credit facility. It will add 16,00 consumers per day across seven states – Arizona, Arkansas, California, Missouri, North Carolina, Tennessee and Texas. With the deal finalized, Addus is set to become the largest provider of home care services in Texas.
“We are excited to add the personal care operations of Gentiva, which will significantly expand our market coverage in seven states, including the new markets of Texas and Missouri,” Addus CEO Dirk Allison said in a statement. “We welcome Gentiva’s experienced personal care operational leadership and caregivers to the Addus family. With our shared experience and expertise, we are well positioned to leverage the strength of the combined operations and provide more consumers and their families with safe, cost-effective care in the preferred home setting.”
The deal was first announced in June.
Based in Frisco, Texas, Addus provides home care, home health and hospice services to over 48,500 consumers through 214 locations across 22 states.
“This important acquisition aligns with our strategy to build scale in existing markets as well as enter select new markets where we can immediately establish a significant personal care presence,” Allison continued. “Importantly, we also expect this transaction to be accretive to our financial results, adding annualized revenues of approximately $280 million. Going forward, we will continue to pursue additional acquisitions that meet our criteria and complement our organic growth initiatives. We have the capital structure and financial flexibility to support our growth strategy in 2025 and beyond.”
On its end, the Atlanta-based Gentiva provides an array of home-based care services, including hospice, home health care and palliative care. It has over 590 locations across the U.S., spanning 38 states.
The company was initially formed when Humana Inc. (NYSE: HUM) acquired Kindred at Home. Humana held onto the home health assets, and divested the personal care and hospice assets to Clayton, Dubilier & Rice (CD&R). Gentiva is now led by David Causby, who is the former CEO of Kindred at Home.
Gentiva made its own splash last year when it agreed to acquire ProMedica’s home care and hospice assets for $710 million.
Now, the company is focusing more on its hospice and palliative care efforts.
“One of the things that we’re really trying to build out is an advanced palliative care model,” Causby said during Home Health Care News’ FUTURE conference last year. “Palliative care is very difficult today. It’s built on the physician Part B schedule. It’s a loss leader. There’s just not very good reimbursement. But we personally feel that’s one of the greatest needs. One of the biggest spends in the health care system today are those patients that sit in that middle bucket that don’t qualify for home health and don’t qualify for hospice. That’s really where palliative should sit.”
With that in mind, finding a partner like Addus to come in and acquire its personal home care assets made sense.
Addus has been looking to build density in markets it likes. Its bread and butter is personal care, but the company has also been building up its home health segment recently.
“Adding complementary clinical services, there will probably be more opportunities for us around skilled home health in Texas and some other markets where we don’t have any clinical services today,” Addus CFO Brian Poff recently said. “It’ll mostly [be] personal care and home health. I think hospice, at the right price in the right markets, is something we’d still be open to, but probably a step behind personal care and home health as a priority.”
