The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these three publicly traded home health companies, all listed on the NASDAQ:
- Almost Family (AFAM)
- LHC Group (LHCG)
- Amedisys (AMED)
Quote of the Month:
“Amedisys is committed to a disciplined capital allocation strategy. This announcement reflects the continued confidence of the Board and our management team in our long-term plan.”
Paul Kussow, CEO, after announcing a $75 million buy-back of Amedisys’ stock.
The Stoneridge Partners Home Health Index Takes Another Step Back!
Well it’s been a tough couple of months for the market in general. The S&P 500 was down 2.6% for the month and is now down 6.7% YTD and 2% from a year ago, so the results for our Home Health Index don’t look too bad. This past month our index dropped 2.7% but we are up 37% YTD and up 74% from a year ago.
While Almost Family led the way down in September with a 9.6% drop, LHC Group and Addus both broke the trend and were up nicely.
The record high set by our HH Index just two months ago, at the end of July at 42.55. We are now off about 4% from that high.
See It to Believe It!
This graph compares the percentage change of the HH Index to the percentage change in the S&P 500 Index for over 13 years, going back to January, 2002. It has been quite a ride.
This is a 12 month trailing chart of the HH Index compared to the actual prices of the individual companies that make up the chart, through September, 2015. Look at the nice uptick for LHC Group.
This graph compares our HH Index to the price of Addus stock (non-Medicare). While the HH Index dropped, Addus had a nice month.
Here are the results of the stock prices for the past two years:
|Company||9/30/15||1 mos change||YTD change||1 yr change||2 yr change|
Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.
Enterprise Value (EV)
|EV (in M))||10/1/15||9/1/15||8/1/15||7/1/15||6/1/15|
|HH Index Total||2,634||2,661
Enterprise Value (EV), aka Selling Price, as a Percent of Revenue.
|HH Index Average||104%||68%||51%|
Multiples of EV/EBITDA.
Think of this as selling price as a multiple of EBITDA.
|HH Index Average||13.0||NA||6.8|
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. EV has been calculated based on stock prices September 1. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology that may differ from that used by a company it is reporting.
Hot off the Press!
Lexington, Kentucky: Nurse Registry and Home Health Corp. along with the estate of former owner, the late Lennie House, have agreed to the terms of a fraud settlement of $16 million owed to the federal government.
Under the terms, Nurses’ Registry will be sold within 90 days to an independent third party, and 70% of the proceeds will go to the federal government.
To read the entire article go Here
LHC Group in the News!
October 2, 2015 – LHC Group, Inc. announced today that it has completed the previously announced acquisition of Halcyon Hospice LLC for $58.5 million in cash or, net of tax benefit, for $51.5 million. The transaction is expected to be accretive to LHC Group’s 2016 earnings by between $0.15 and $0.20 per diluted share, while earnings for the fourth quarter of 2015 are expected to reflect transaction and integration costs totaling $0.06 per diluted share.
Based in Cumming, Georgia, Halcyon is one of the largest independent providers of hospice services in the southeastern United States. It operates 16 hospice locations across three states, including two inpatient hospice facilities, and has approximately 400 employees. Halcyon’s service area covers 183 counties across Georgia, Mississippi and South Carolina, including 59 counties in which LHC is licensed for home health. Annual revenue for Halcyon is approximately $41 million. This acquisition will increase LHC’s hospice service line to 53 locations in 12 states with over $110 million in annual revenue.
Almost Family in the News!
Almost Family, Inc (NASDAQ:AFAM) announced that it has entered into an agreement to acquire the assets of the Medicare-certified home health agency owned by Bayonne Visiting Nurse Association in Bayonne, NJ. The transaction is expected to close before the end of 2015, subject to regulatory approvals.
Included in this acquisition is a Certificate of Need to provide home care services in Hudson County, New Jersey.
Brain Bruenderman, one of our partners, provided sell-side advisory services.
Amedisys in the News!
Amedisys’ Board authorized the repurchase of up to $75M in stock during the next year. CEO Paul Kusserow says, “Amedisys is committed to a disciplined capital allocation strategy. This announcement reflects the continued confidence of the Board and our management team in our long-term plan.”
Merger & Acquisition Activity:
SOLD BY STONERIDGE PARTNERS!
Bayonne, NJ – Almost Family, Inc (NASDAQ:AFAM) announced that it has entered into an agreement to acquire the assets of the Medicare-certified home health agency owned by Bayonne Visiting Nurse Association in Bayonne, NJ. The transaction is expected to close before the end of 2015, subject to regulatory approvals. Brian Bruenderman, one of our partners, provided sell-side advisory services.
Newton, NC – Epic Health Services Inc., a Dallas-based provider of pediatric skilled nursing and therapy, announced today that it has acquired pediatric and adult home care provider Unifour Nursing, based in Newton, North Carolina. Brian Bruenderman and Benjamin Bogan, Partners here at Stoneridge Partners, provided sell-side advisory services.
Quincy, IL – CareLink, Inc. a private duty agency sold to a regional health care provider. Rhonda Gronberg, our Director of Development, provided advisory services.
Visit us at these conferences:
Kansas: Join us October 15-16 at the 2015 Power Up InterHab Annual Conference in Wichita at the Hyatt Regency.InterHab Conference
NAHC Annual: Join us in Nashville October 28-30. For the 12th straight year we will be exhibiting at NAHCs Annual Conference & Exhbition. NAHC Annual Conference
South Carolina: Join us at the South Carolina Home Care & Hospice annual conference at Hilton Head. November 2-3 at the Sonesta Resort. Ben Bogan, one of our partners, will be giving a presentation titled “Massive Mergers & Acquisitions – What Does it Mean to You?” South Carolina Conference
Las Vegas – Decision Health’s Private Duty conference- November 16-18 at the newly remodeled Tropicana Resort. Come on out to ‘Vegas, have a great time and get an update on Private Duty M&A. Private Duty Conference
At all of these conferences we will be setting up confidential meetings with buyers and sellers of home care agencies and hospices.
Joe Lynch, One of our Partners, Authors a Book!
Joe’s new book, “Finding Dad”, combines amusing and interesting stories about his many years in home care, along with fascinating stories about his father, a World War II fighter pilot. If you are in home care, and/or have an interest in WWII history you will enjoy this book, which we are shamelessly promoting. For more information and to order Joe’s book click here: Finding Dad
Exclusively Listed for Sale by Stoneridge Partners:
- Minnesota – $12 million revenue Medicare certified home health agency with large Medicaid census, well established and deficiency free, SE Minnesota. Stoneridge file S-5268
- DFW Area – Approx. $3.5 million home care and hospice agency just listed. Stoneridge file S-6600.
- California- Approx. $2.6 million Medicare home health agency. Central coast region of Northern California. 90% Traditional Medicare. Strong gross profit with opportunities for immediate, sustained, long-term growth. Accredited. Stoneridge file S-5400
- Pennsylvania – Approx. $4 million Medicaid home care agency located in central PA. Accelerated and profitable growth trajectory with continued opportunity for future growth. Professionally run with outstanding clinical and excellent staff in place. Stoneridge file S-1000
- Colorado – $2.5 million diversified home care agency and hospice, accredited with excellent books and records. Stoneridge file #S-1005
- Rhode Island – $2.5 million Medicare agency. Accredited in CON state. Stoneridge file #S-1100
- Oklahoma – $3.5 million revenue Oklahoma City Medicare certified home health agency. 90% of revenue from traditional Medicare. Stoneridge file S-3200
- Florida – $4 million in pure private pay. 15% bottom line. Accredited on the central east coast. Stoneridge file #S-3250.
- Illinois – $5 million plus Medicare agency with four offices. Strong management with excellent clinical. Stoneridge file #S-6550
- Kentucky – Certificate of Need for 3 counties in Northern KY, rare opportunity to establish or expand services in populous CON service area. Stoneridge file S-1121 ON CONTRACT
- Illinois – $3 million hospice in Chicago area. Average census 58. Stoneridge file #S-5325
- Texas – $5 million East Texas Medicare certified home health agency with diverse payor sources, including Medicare, Medicaid, pediatric and private pay. Stoneridge file S-3665
- Illinois – $2.3 million Chicago area Medicare agency, clean surveys, excellent clinical reputation. Stoneridge file #S-4300
- Massachusetts – $5 + million home health agency, primarily Medicaid, but also private pay and commercial insurance, plus Medicare certification. Zero deficiencies on last survey. Stoneridge file S-9300 ON CONTRACT
- Washington State – $2 million revenue. This agency has a long history of profitability. Diverse payor sources includes Medicaid programs and private pay. Great reputation in a unique service area. Stoneridge file S-7010 ON CONTRACT
- Florida – $5 million Medicare agency located in the Tampa – St. Pete area. Accredited, with solid bottom line. Stoneridge file S-4109 ON CONTRACT
- Texas – $8 million East Texas agency, Medicare certified with deficiency free survey, no audits, and top-of- the line software. Stoneridge file S-3001 ON CONTRACT
- Texas – $1.5 million East Texas Medicare certified home health agency, providing skilled care, approx 75% from traditional PPS Medicare. Last survey was deficiency free. Stoneridge file S-4088
- Texas – $2.3 million Medicare certified home health agency in Houston, Texas. 92% Traditional Medicare. Stoneridge file S-1542
- North Carolina – $2.2 million Medicaid provider with two locations serving Charlotte, NC and surrounding areas. Service waiver programs include: PCS, PDN, and CAP. Accredited. Professionally run company with outstanding clinical. Great tuck-in opportunity. Stoneridge file S-2999 SOLD
- Texas – $3.3 million accredited Medicare home health agency. Profitable and still growing with approximately 87% of revenue coming from traditional Medicare. Strong marketing team in place with diversified referral sources. Stoneridge file S-1500 ON CONTRACT
- Texas – $2 million Fort Worth Medicare agency, approx 90% traditional Medicare.Stoneridge file S-2650
- Florida – $2.8 million Medicare certified agency serving District 3. Solid operational team in place. 95% Medicare. Stoneridge file S-9000
- Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care. Stoneridge file S-5232.
- Texas $1.2 million Medicare certified home health care agency in the Galveston area. Stoneridge file S-9015
- Texas – $1 million Medicare agency in the DFW area – 995 of revenue from traditional Medicare. Stoneridge file #S-1015
To see more home care agencies and hospices exclusively listed for sale by Stoneridge Partners go to the following link: Agencies for Sale
Do you know of any acquisitions that have taken place? We would be interested in your comments. At the top of this column is a “Contact Tab” with a section for comments. These can be sent anonymously. The return email address can be left blank. We are interested in what you have to say, or acquisitions that you know about.
Another Favorite from the New Yorker
For more cartoons and additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: http://stoneridgepartners.com/category/blog/.
From Don Cummins, Publisher of “The Home Health Index” firstname.lastname@example.org – 800-218-3944