Aveanna Healthcare Holdings (NASDAQ: AVAH) has announced plans to acquire Thrive Skilled Pediatric Care for $75 million.

The acquisition, announced Thursday, will deepen Aveanna’s reach in several of the states in which it operates and expand its footprint into two new states.

“I am thrilled to welcome the entire Thrive Skilled Pediatric Care team to Aveanna,” Jeff Shaner, CEO of Aveanna, said in a statement. “Like Aveanna, Thrive SPC is committed to delivering high-quality and patient-centered clinical care that leads to exceptional outcomes for patients and families. Thrive SPC is an exceptional cultural and geographical fit for us and reinforces our strategic mission of remaining the leader in delivering high-quality care while bringing unprecedented value and clinical innovation to our payors and stakeholders.”

Wakefield, Massachusetts-based Thrive operates 23 locations across Arizona, Georgia, Kansas, New Mexico, North Carolina, Virginia and Texas. The company, backed by Boston-based investment firm Summit Partners, focuses primarily on skilled private duty nursing services but also offers pediatric therapy, licensed health aide services and certified nurse assistant services.

“We believe Aveanna is an ideal partner for Thrive SPC, given the combined company’s shared vision for delivering the highest quality care to patients and innovative and cost-effective solutions to its payors,” Ross Stern, a managing director at Summit Partners, said. “We are confident that this transaction will position the combined company to deliver compelling benefits for patients and families going forward.”

Atlanta-based Aveanna will fund the acquisition through shares of common stock and cash from its balance sheet, among other sources. The company has locations in 34 states and offers care for children and adults, including home health and hospice services, day treatment centers for medically fragile and chronically ill people and rehabilitation services. Its private-duty nursing services arms account for the bulk of its business.

Aveanna recorded over $2 billion in revenue for the fiscal year ending Dec. 28, 2024.

The deal, expected to close in Q2, marks a return to acquisitions for Aveanna, according to an analyst note from the investment banking company Stephens. 

“The deal represents a reintroduction to AVAH’s M&A growth pillar … which was relatively dormant as AVAH focused on its multi-year strategic transformation (e.g., preferred payers, value-based agreements, and deleveraging) of the organic business,” the note read.

Aveanna’s M&A history includes its 2019 attempt to acquire the home health care division of Maxim Healthcare Services, which collapsed after a Federal Trade Commission (FTC) investigation in 2020. In 2021, Aveanna successfully purchased Comfort Care, an adult home health and hospice company, for $345 million. The same year, the company acquired Accredited Home Care, a private duty services company, for the base purchase price of $180 million.

The company, which was formed in 2017 through the merger of Epic Health Services and Pediatric Services of America, went public in 2021.

In 2024, Aveanna’s fiscal strategy focused on increasing its number of private-duty services preferred payer agreements. The company over-achieved on this goal, adding 30 more agreements to its roster. The strategy led directly to improved financial performance, according to Aveanna’s CEO.

“Our Q4 and full year 2024 results highlight that we continue to align our objectives with those of our preferred payers and government partners,” Shaner said on the company’s Q4 2024 earnings call. “By focusing our clinical capacity on our preferred payers, we achieved solid year-over-year growth in revenue and adjusted EBITDA.”

The strategy also improved Aveanna’s caregiver hiring and retention rates, Shaner said, allowing the company to achieve more normalized growth rates despite a challenging operating environment.

Expanding at-home pediatric offerings could represent a promising opportunity for others besides Aveanna. The pediatric home health market size was estimated to reach $12.53 billion in 2023 – and is expected to grow at a compound annual growth rate of 7.85% through 2030, according to Grand View Research.

Another provider recently expanded its pediatric offerings. Atrium Health, which is part of Advocate Health, launched the nation’s first pediatric hospital-at-home (HaH) program. The pediatric HaH has already reduced readmissions, according to Atrium clinicians.

Still, operating at-home pediatric care service lines comes with distinct challenges. Reimbursement, hiring and finding the right operating models can all impact providers seeking to enter the space.

Editor’s note: An earlier version of this article incorrectly said that Aveanna brought in over $2 million in revenue for the fiscal year ending Dec. 28, 2024. Aveanna actually recorded over $2 billion in revenue.