Addus HomeCare Corporation’s (Nasdaq: ADUS) planned $275 million acquisition of AccentCare’s personal care division is slated to close, at the earliest, in Q1 of 2027.
The deal is one of several large deals that Addus executives have indicated are in the company’s pipeline and gives the company deep penetration in new markets at a reasonable price, according to company leadership.
“We had obviously been indicating to people that we had some opportunities on some larger Gentiva-sized assets that we were going to come to market, and this obviously was one of those,” said Brian Poff, executive vice president and chief financial officer, at Jefferies Healthcare Services and Technology Conference on Tuesday.
Frisco, Texas-based Addus announced Monday that it had signed a definitive agreement to acquire AccentCare’s personal home care business line outside of New York. The acquired assets will span 10 states and serve an average daily census of about 13,700 clients and propel Addus into six new states.
Poff said he expects the new assets to have a gross margin similar to Addus’ existing personal care service line, in the upper 20% range.
Connecting AccentCare’s personal home care division to Addus’ also creates potential for new efficiencies, Poff said.
“Their EBITDA, right now or out of the gate, is probably going to be just under sub 10%,” Poff said. “We’ll have some opportunities to bring that up to our normal level of our [personal care services] division. That will probably take us, we think, 12 to 18 months to fully realize those synergies, but we’ll probably start to get some of those fairly quickly.”
The transaction is similar to Addus’ $350 million acquisition of Gentiva’s personal home care division, in which a larger home health and hospice platform has divested its personal home care line, said Brad Bickham, Addus’ advisor to the CEO.
“So not a lot of back office came with it, although within the division there is a fair amount of support for the personal care,” Bickham said. “It’s good that we’ve done one already, very similar to that. In fact, the Gentiva one is probably even more challenging, just because we had a tighter time frame to switch over for payroll systems.”
The integration process will include converting the home care line to Homecare Homebase, one of the largest technology and administrative services companies serving home-based care. Addus is currently transitioning its legacy personal home care business to operate on Homecare Homebase, so the company will likely add the new assets to the end of its conversion schedule, Poff said.
The acquisition sparked very positive feedback from payers who have no shortage of interest in value-based care contracts, Bickham said. The deal impacts many managed care payers in Texas, he said, who are now looking to work with Addus to bend the cost curve, provide better care and incentivize patients to work with Addus as a provider of choice.
Focusing on their core businesses
The acquisition shows Addus is executing its existing strategy and that AccentCare is shifting its core operations, Leslie Levinson, partner at Robinson+Cole, told Home Health Care News.
Addus has diversified into hospice and Medicare services, Levinson said, but its “roots have always been in personal care.” With its historic personal care focus and its strategy of making large acquisitions and increasing scale in its markets, the deal was unsurprising, he said.
By divesting most of its personal care business, the deal marks a return to what AccentCare sees as its core mission, Levinson said: Medicare home health, hospice and palliative services.
“If you’re able to exit and align entirely to one buyer, that makes that strategy more efficient and easier to execute than having to do it in pieces,” he said.
Hartford, Connecticut-based Robinson+Cole is a law firm with over 260 attorneys operating throughout the Northeast, Mid-Atlantic, Florida and California.
The overall home-based care dealmaking landscape is stabilizing, Levinson said, with interested parties eager to explore transaction opportunities.
The deal will likely close with Addus in a position to execute more large deals, Poff said. Given the company’s cadence and cash flow, Addus will likely be debt-free with some cash on hand if the deal closes in Q1 of 2027, he said, leaving the company with a lot of capacity to execute more deals.
“Our interest is in continuing to be acquisitive beyond AccentCare,” Poff said. “We think there are more consolidation opportunities. We think, from a capital perspective, we’re going to be in a great position to continue to do that.”
When pursuing new deals, Addus looks for strong compliance and clinical processes, Bickham said, as well as the ability to enter new markets at scale.
“Going back to the Gentiva transaction, we were able to enter Texas at scale, and then … follow it up with additional transactions, [whether] tuck-ins or, in this case, the AccentCare transaction; it’s a pretty sizable Texas book of business that we’ll add,” Bickham said. “I think first and foremost, if we’re going to go into a new state, let’s do it in the right way.”
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