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Addus HomeCare to buy Gentiva's personal care biz for $350M

Jun 10, 2024
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Illustration: Gabriella Turrisi/Axios

Home care giant Addus HomeCare (Nasdaq: ADUS) will acquire the personal care operations of private equity-backed hospice company Gentiva for approximately $350 million.

Why it matters: Gentiva is the largest provider of personal care services in Texas, giving Addus a strong foothold in the state.

Zoom in: Clayton, Dubilier & Rice-backed Gentiva's personal care operations have annualized revenues of about $280 million, Addus CEO Dirk Allison said in a statement.

  • Headquartered in Atlanta, its personal care business houses divisions including Girling Personal Care, The Home Option and Victorian Home Care, providing services that help patients with daily life.
  • Gentiva operates across seven states.
  • "After funding this acquisition, Addus will still maintain a leverage ratio of less than three times," Allison said in a statement.

Catch up quick: Both parties have been active dealmakers.

  • In early 2023, Gentiva acquired hospice and home care assets from ProMedica for $710 million. (It's unclear if any portion of that business is a part of this deal and Addus did not immediately respond to a request for comment.)
  • Addus has been vocal about seeking personal care-specific acquisitions, most recently acquiring personal care services company Tennessee Quality Care for $106 million last June.
  • "We also believe this acquisition strategy will continue to strengthen our ability to participate in value-based contracts with our payers and to adapt to potential reimbursement changes," Allison said during the company's Q1 earnings call.

State of play: A growing aging population is fueling the home health, home care and hospice sector, with major health players trying to figure out their strategy.

  • UnitedHealth is attempting to acquire Amedisys for $3.3 billion, which would give the insurer access to the company's nearly 500,000 patients, but the deal is under antitrust review with the Department of Justice.
  • CVS bought home care enabler Signify last year for $8 billion in a bid to penetrate the home health market.
  • Meanwhile, other publicly traded home health and home care players like Chemed, The Pennant Group and BrightSpring Health (which completed its IPO in January) have all indicated they're preparing to make acquisitions.
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