Home Health Companies Record Strong April Results
Home Health Index May 2017 | Stoneridge Partners: The share prices of publicly held home health companies reached a new index high in April, rising nearly 7% during the month and far outpacing the performance of the S&P 500 index, according to the Home Health Index tracked by Stoneridge Partners.
Year over year, home health companies Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG) on average have gained approximately 32% in value versus the S&P 500, which has risen 17% over the same time frame and which rose just over 1% during April. The Home Health Index has risen steadily this year, surpassing the performance of the overall stock market.
April’s Home Health gains surpassed a slighter uptick of 1.77% seen in March and 4.5% increase in February, marking a steady, consistent climb.
“The Home Health Index saw a solid increase in April, in part due to confidence among providers following regulatory delays and pro-business initiatives in Washington,” said Rich Tinsley, president of Stoneridge Partners. “The outlook remains strong for home health companies that are considering a sale as part of a succession plan, or simply to take advantage of the strong sellers’ market.”
By company, all three providers tracked by the Home Health Index experienced gains during April, with Amedisys seeing the greatest increase at more than 12% month-over-month. The company’s CEO Paul Kusserow commented during a recent investor healthcare conference that the company views an opportunity in several recent home health regulatory delays, and the impact of fewer rules from the Centers for Medicare and Medicaid Services (CMS) on Amedisys’s performance.
LHC Group’s share price increase tapered during April to 4.25%, after a major uptick of 9.58% in March, while Almost Family’s performance reversed course in April and ticked up 4.09% after experiencing a 4.31% decline the previous month.
Addus Homecare (Nasdaq: ADUS), which is not tracked by the index because little of its revenue comes from Medicare, also shifted course in March, with a 5.65% gain in its share price. The company posted losses in the three previous months, most recently declining 2.82% in March.
Enterprise value of all four publicly held companies, including Addus, has risen year over year to date, with selling price as a percent of revenue exceeding 100% in all cases, according to Stoneridge Partners’ analysis.
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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)
This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index for over 14 years, going back to 2002.
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.
This graph displays HH Index performance over the past 24 months.
This graph compares the HH Index to the price of Addus stock (non-Medicare).
(Home Health Index May 2017 | Stoneridge Partners)
Here are the results of the stock prices for the past two years:
|Company||4/30/17||1 mos change||YTD change||4/30/16||4/30/15|
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)||4/30/2017||4/30/2016|
|HH Index Total||3739||3025|
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*||128%||113%|
Multiples of EV/EBITDA
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||18.92||14.34|
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. 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 which may differ from that used by a company it’s reporting. (Home Health Index May 2017 | Stoneridge Partners)
Recent Transactions From Around The Country
- AccentCare, a multi-state home health and hospice provider, has acquired Mississippi’s largest home health provider, Sta-Home Health & Hospice.
- Origins Behavioral Healthcare, a provider of residential and outpatient substance use treatment, was acquired by TRT Holdings, Inc.
- Amedysis, Inc., the Baton Rouge, Louisiana-based home health and hospice provider signed a definitive agreement to buy the assets of the Knoxville-based personal care provider, East Tennessee Personal Care Service.
- Addus Homecare signed a definitive agreement to purchase Options Home Care, a provider of personal care services across New Mexico.
Exclusively Listed For Sale By Stoneridge Partners
|State||Agency Profile||Status||Reference Number
|Arizona||$2+ million home care agency in Southern Arizona. Diverse payor sources (Medicaid/Private Pay/ W/C. Diverse referral sources. Great reputation.||Available|
|California||$4.8 million neuroscience-driving recovery treatment center for traumatic brain injury and SUD. Has helped over 180 professional athletes from the NFL, NHL, NBA and MLB. $1.2 million AEBITDA. Great campus offering full continuum of care. Zero competition in this space.||Available|
|California||Medicare certified Home Health agency that was established in 2003. $2 million annual revenue in 2018. PDGM revenue neutral. Located in Southern California. Clean business with no ADR's.||Available|
|California||Growing $1.9 million revenue. Private pay. Independently owned. Full staff in place.||Available|
|California||$1.6 million Hospice located in Los Angeles County. Consistent census of 25 patients over the last 3 years. Joint commission accredited. Strong bottom line with staff in place.||Available|
|California||32 bed detox and residential treatment center. Great location and setup. In network. Large growth with a waiting list. Seeking loan/debt investment. Attractive income option for investor.||Available|
|Connecticut||$6 million Medicaid/Medicare agency. Nice growth trend. Stable margins, great surveys.||Available|
|Florida||$9.5 million Home Health Agency. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare.||Available|
|Florida||$1.6 million revenue. Pediatric Medicaid agency.||Available|
|Florida||Medicare certified home health agency. $1.4 million annual revenue. 4.5-star & Home Care Elite 2 years running. Accredited. District 3. Motivated Seller.||Under Contract|
|Georgia||ID/DD Services. $1 million revenue. Residential and Day Services. Atlanta Suburb.||Available|
|Illinois||$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS.||Available|
|Illinois||$2.8 million Home Health agency. 100% Medicare. Loyal caregiver and patient base.||Available|
|Illinois||Hospice. Census in mid-70's. Accredited. Chicago area.||Available|
|Louisiana||Boutique full service clinical laboratory specializing in preventative diagnostic testing.|
Medicare & Medicaid certified, and insurance contracts in over 20 Southeast States. Several unique programs and innovative technologies.
|Maryland/DC/Virginia||Large Medicare & Medicaid home care agency. Poised for continued growth.||Available|
|Massachusetts||Medicare and Medicaid certified Home Health agency. |
$13+ million in annual revenue and growing. Diverse payor mix. Strong Management in place. Accredited.
|Michigan||$1.5 million private duty home health agency in eastern Michigan. Profitable and well positioned for additional growth. Self-sufficient staff in place. 82 long-term clients.||Available|
|Minnesota||$9 million Medicaid agency. Consistent growth & profitability. Recent rate increase. Attractive Medicaid margin.||Available|
|New York||Annualizing at $1.3 million revenue. 40% Non-Medicare/Private Insurance skilled nursing. 45% Managed LTC. Southern New York. Joint Commission Accreditation.||Available|
|New Mexico||$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community. Staff in place.||Available|
|North Carolina||$1 million ID/DD Agency. Long-term client base. Growth potential with real estate. Strong margins.||Available|
|Ohio||Southeastern Ohio. $3.5 million annual revenue. Diverse referral source mix.||Available|
|Oklahoma||$1.7 million ID/DD agency. Long history in the community. Profitable/recent rate increase.||Available|
|Pacific Northwest||Full continuum in Washington State. $3,625,000. revenue with $1,100,000 EBITDA. States has moved from BHO to MCO for Medicaid. Co-occurring, Medicaid paid, 40 bed facility, 40 employees, census is very strong.|
Outpatient is full. Opportunity for marketing. SUD mental health gambling. Equine therapy and other perks.
|South||28 bed, IOP capacity of 40, full continuum SUD treatment center, dual diagnosis, pending JCAHO. $4+ million revenue, highly competitive in network contracts, average census of 30. Existing marketing relationships with county, parole, local hospitals, churches and universities. Solid business in desirable location, little competition, good opportunity.||Available|
|South||National growth opportunity. No direct competition for niche market. Unique program and strong branding. PHP/IOP with census and revenue growth. Seeking strategic partner||Available|
|Southwest||$25 million in annual revenue. Provider of Waiver and ICF ID/DD Services. Statewide Platform. Strong management team. Excellent reputation for quality services.||Available|
|Southwest||$5+ million outpatient treatment center. Fully accredited. 37 beds. Recently revamped to increase growth and margin. Great census, UR, acquisition and solid numbers. Out of network and transitioning some in network.||Available|
|Southwest||64 bed full continuum treatment center in 2 Southwest US metropolitan cities.|
$4 million pro forma EBITDA run rate. 3rd location set to open May 2019. Run rate based on 30% occupancy with significant growth expected. Strong infrastructure to support growth trajectory.
|South-Atlantic||$12+ million in annual revenue. Home Health Agency (HHA) and Adult Day Care Center (ADC). HHA (represents 85% of revenue). ADC (represents 15% of revenue). HHA is primarily Medicaid business but is Medicare-certified. Accredited.||Available|
|South Texas||Hospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues.||Available|
|Texas||$2.6 million revenue Home Health agency in East Texas. Great local reputation, with strong financials. 2018 adjusted EBITDA $606,000. Has second license with minimal census available.||Available|
|Texas||$2 million Medicare home health agency in Austin, TX. Offers outstanding reputation and strong management & clinical teams. CHAP accredited & consistently Top 100 or Top 500 Home Care Elite for past 8 years.||Available|
|Texas||$1.7 million Medicare home health agency. Located in Southwest Houston. Well-established with predictable referral sources. Very profitable.||Available|
|Texas||48 bed full continuum treatment campus, all in-network. Established management team, 3-year CARF Accredited. $1.7 million of AEBITDA on $6 million of revenue. Major metropolitan market. Great asset for a strategic buyer.||Available|
|Texas||$1.4 million revenue pediatric therapy business. Company provides Physical Therapy (PT), Occupational Therapy (OT), and Speech Therapy (ST) to disadvantaged and disabled children in near a major metropolitan city in Texas and the surrounding counties. Positive reputation for providing quality help in an environment comfortable to the child. Founded in January 2008 as an investment for the owner. Average census is 190 patients with a goal of 225 for calendar year 2019.||Available|
|Texas||$1 million revenue. Very clean and well established home health agency in the heart of West Texas. Fully staffed and ready for a new owner to step right in.||Available|
|Texas||$1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare.||Available|
|Texas||$650,000 revenue. Medicare certified. Licensed in 6 counties North of Dallas, TX.||Available|
|Texas||Pediatric therapy company in Houston, TX. Census of 165. 75% Medicaid reimbursed. Systems and staff in place.||Available|
|Texas||Home Health agency in Texas. Near Sam Houston National Forest. Clean license with minimal census and minimal revenue.||Available|
|Texas||Clean hospice provider number. Located in West Texas.||Available|
|USA||New software application. Potential investment opportunity. Great test results.|
Helps connect those in recovery socially. Helps connect therapists to patients. Facilitates total successful recovery and gathers important helpful data.
|Virginia||$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000.||Available|
|Florida||$3.5 million private duty home health agency on Florida's east coast. CHAP accredited. 26 years of outstanding service. Diversified pay mix; Private duty, Workers comp, Private pay, and Long-term care insurance. Strong management and support staff.||Under Contract||
|Florida||Medicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.||Under Contract||
|Florida||$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.||Under Contract||
|Kentucky||Medication-assisted clinic. IOP counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid.||Under Contract||
|New York||$13 million revenue LHCSA. 30-year history. Licensed in all 5 boroughs.||Under Contract||
|Oklahoma||Home Care Agency. Approximately $1.5 million in annual revenue. Predominantly private pay with some LTC, VA, and WC. Outstanding clinical. Great reputation.||Under Contract||
|Pennsylvania||$4.3 million revenue. Home health, home care and hospice agency. 18% bottom line.||Under Contract||
|Texas||$3.6 million Hospice, home health and palliative care agency. 90% Traditional Medicare. Service area in 13 counties around Harris County. CHAP accredited. Staff in place.||Under Contract||
|Texas||$3.5 million all Medicaid Home Care company located in Houston, TX. 20%+ year over year revenue growth since 2016. Nice bottom line.||Under Contract||
|Texas||$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place.||Under Contract||
|Texas||$2.2 million Dallas-area Medicare home health agency. 22% bottom line. Well-established with a very clean compliance record. Full management team in place.||Under Contract||
|Virginia||$6 million Medicare certified agency in Northern Virginia.||Under Contract||
Do you know of any acquisitions that have taken place? We are interested in your comments. At the top of this column is a “Contact Tab” with a section for comments. These can be sent anonymously and the return email address can be left blank.
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Home Health Index May 2017 | Stoneridge Partners: From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at firstname.lastname@example.org or (239) 561-0826 and toll-free 800-218-3944