Home Health Index | 2017 DECEMBER UPDATE

Home Health Care Stocks Rise as LHC, Almost Family Announce Merger

Home health care stocks rose in November amid news that two home health care giants are joining forces, according to the latest update of the Home Health Index by Stoneridge Partners. The deal between LHC Group (Nasdaq: LHCG) and Almost Family (Nasdaq: AFAM) is expected to close at the beginning of 2018 and results in a company with a combined revenue of $1.8 billion. The implied transaction value is roughly $2.4 billion, according to LHC Group.

The Home Health Index, which tracks market values of three of the largest publicly traded home health care companies in the U.S.—Almost Family, Amedisys (Nasdaq: AMED) and LHC Group—gained 12.40% in November compared to the previous month. The index zoomed by the S&P 500, which rose 2.4% in November.

“When finalized, the merger between Almost Family and LHC Group will likely result in a big change for industry investors,” said Stoneridge President Rich Tinsley. “It will also change this Index, as we intend to add to it Kindred Healthcare.”

The combined organization will trade on the Nasdaq under the symbol “LHCG,” and operate out of Lafayette, Louisiana. When completed, the organization will have 781 locations total in 36 states and more than 31,000 employees.

News of the merger impacted share values: Lafayette, Louisiana-based LHC Group’s stock dropped 1.17% in November. Year to date, LHC Group’s share prices have climbed 43.92%, which is still the largest yearly gain on the Index.

Louisville, Kentucky-based Almost Family gained the most ground in November. The company’s share prices rose 28.02% that month. The latest gains pushed Almost Family’s year-to-date stock value up 34.69%.

Amedisys also saw big gains in November. The Baton Rouge, Louisiana-based company’s stock value grew 16.25% in the month. Year to date, its share prices have risen 26.67%, according to the Index.

Share prices for Addus HomeCare (Nasdaq: ADUS), which is not included in the index because so little of its income comes from Medicare, dipped 5.67% in November. Year to date, Addus’s stock price is down 4.99%.

Quote Of The Month 

“Primarily, we are seeing people utilizing home care and a smaller and smaller percentage using nursing home care.  People think, ‘While I might start out needing care at home, eventually I’ll need to be in a facility.’ But that’s not something we see in our data. For the most part, people are able to stay at home for the whole time.”  said Beth Ludden, Senior Vice President for Genworth.

Read the Full Article Here: How to Get Long-Term Care at Home Without Busting the Bank

See It To Believe It!

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 December 2017 | Stoneridge Partners)

 

Here are the results of the stock prices for the past two years:

Company 11/30/17 1 mos change YTD change 11/30/16 11/30/15
Almost Family 59.4 +28.02% +34.69% 41.3 42.37
Amedisys 54 +16.25% +26.67% 41.44 40.59
LHC Group 65.77 -1.17% +43.92% 42.88 46.55
HH Index* 59.72 +12.40% +35.29% 41.87 43.17
S&P 500 2637.37 +2.40% +17.80% 2204.97 2080.41
Addus 33.3 -5.67% -4.99% 34.7 22.8

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) 11/30/17 11/30/16 11/30/15
Almost Family 946 548 493
Amedisys 1820 1410 1410
LHC Group 1280 841 868
HH Index Total 4046 2799 2771
Addus 410 313 239


Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 11/30/17 11/30/16 11/30/15
Almost Family 132% 89% 96%
Amedisys 125% 101% 115%
LHC Group 133% 95% 112%
HH Index Average* 130% 95% 107%
Addus 100% 87% 72


Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 11/30/17 11/30/16 11/30/15
Almost Family 23.43 11.81 13.43
Amedisys 17.25 17.77 15.83
LHC Group 13.91 10.21 11.19
HH Index Average* 18.20 13.26 13.48
Addus 12.27 12.94 10

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 December 2017 | Stoneridge Partners)

SOLD by Stoneridge!

  • Advanced Home Health Services of Moulton, TX was acquired by Excelin Home Health.  Partner, Joe Lynch, provided sell-side advisory services.
  • Home Therapeutic Solutions, Inc. of Houston, TX was acquired by Excelin Home Health.  Partner, Joe Lynch, provided sell-side advisory services.

Recent Transactions From Around The Country

  • Hospice Source, a full-service, national provider of medical equipment (“DME”), acquired Home Medical Professionals (HMP) in Gainesville, GA.  This acquisition expands Hospice Source’s geographical footprint into the greater Atlanta and Georgia markets.
  • ResCare, the largest diversified health and human services provider in the U.S., acquired A Place to Call Home, an Arizona based company providing foster care, respite, host home and related supports to children and individuals with intellectual and developmental disabilities.
  • LHC Group of Lafayette, LA agreed to enter into an all-stock merger of equals transaction with Almost Family of Louisville, KY.
  • Silver Oak Services Partners has agreed to acquire Caring People, a home healthcare agency that works with seniors in New York City.

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
SBA-6228
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
STS-1907
CaliforniaMedicare 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
SCM-7298
CaliforniaGrowing $1.9 million revenue. Private pay. Independently owned. Full staff in place. Available
SJL-4483
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
SCM-9679
California32 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
SJD-2449
Connecticut$6 million Medicaid/Medicare agency. Nice growth trend. Stable margins, great surveys.Available
SBB-3697
Florida$9.5 million Home Health Agency. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare. Available
SCM-6925
Florida$1.6 million revenue. Pediatric Medicaid agency. Available
SCJ-8520
FloridaMedicare 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
SCJ-1730
GeorgiaID/DD Services. $1 million revenue. Residential and Day Services. Atlanta Suburb. Available
SBH-6806
Illinois$5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS.Available
SBA-2734

Illinois$2.8 million Home Health agency. 100% Medicare. Loyal caregiver and patient base. Available
SCM-3291
IllinoisHospice. Census in mid-70's. Accredited. Chicago area.Available
SBA-5325
LouisianaBoutique 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.
Available
SJD-6825
Maryland/DC/VirginiaLarge Medicare & Medicaid home care agency. Poised for continued growth.Available
SBB-7499
MassachusettsMedicare and Medicaid certified Home Health agency.
$13+ million in annual revenue and growing. Diverse payor mix. Strong Management in place. Accredited.
Available
SBA-6010
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
SCM-6034
Minnesota$9 million Medicaid agency. Consistent growth & profitability. Recent rate increase. Attractive Medicaid margin. Available
SBB-7085
New YorkAnnualizing at $1.3 million revenue. 40% Non-Medicare/Private Insurance skilled nursing. 45% Managed LTC. Southern New York. Joint Commission Accreditation.Available
SBA-6824
New Mexico$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community. Staff in place.Available
SBA-5295
North Carolina$1 million ID/DD Agency. Long-term client base. Growth potential with real estate. Strong margins. Available
SBH-9905
OhioSoutheastern Ohio. $3.5 million annual revenue. Diverse referral source mix.Available
SBB-4298
Oklahoma$1.7 million ID/DD agency. Long history in the community. Profitable/recent rate increase. Available
SBB-8891
Pacific NorthwestFull 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.
Available
SJD-4921
South28 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
SJD-1118
SouthNational growth opportunity. No direct competition for niche market. Unique program and strong branding. PHP/IOP with census and revenue growth. Seeking strategic partnerAvailable
SJD-8349
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
SBH-2042
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
SJD-3448
Southwest64 bed full continuum treatment center in 2 Southwest US metropolitan cities.
JCAHO accredited.
In-network.
$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.
Available
SJD-4008
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
SBA-9973
South TexasHospice. $3.5 million in annual revenue. Accredited. Clean: No cap or regulatory issues. Available
SBA-8064
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
SCM-9753
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
SJL-5971
Texas$1.7 million Medicare home health agency. Located in Southwest Houston. Well-established with predictable referral sources. Very profitable. Available
SJL-6080
Texas48 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
STS-5370
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
SCM-3034
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
SJL-8770
Texas$1 million Medicare certified agency. Licensed in 7 counties in the Houston area. 80% is traditional Medicare. Available
SBA-1542
Texas$650,000 revenue. Medicare certified. Licensed in 6 counties North of Dallas, TX.Available
SBA-8417
TexasPediatric therapy company in Houston, TX. Census of 165. 75% Medicaid reimbursed. Systems and staff in place. Available
SJL-4615
TexasHome Health agency in Texas. Near Sam Houston National Forest. Clean license with minimal census and minimal revenue. Available
SCM-4098
TexasClean hospice provider number. Located in West Texas.Available
SJL-2984
USANew 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.
Available
SJD-1777
Virginia$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000. Available
SCM-7368
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
SCM-8429
FloridaMedicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.Under Contract
SBA-8305
Florida$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.Under Contract
SCM-1148
KentuckyMedication-assisted clinic. IOP counseling for substance abuse and co-occurring disorders. Profitable with strong team in place. 150 clients. 95% Medicaid. Under Contract
STS-1093
New York$13 million revenue LHCSA. 30-year history. Licensed in all 5 boroughs.Under Contract
SBB-8249
OklahomaHome Care Agency. Approximately $1.5 million in annual revenue. Predominantly private pay with some LTC, VA, and WC. Outstanding clinical. Great reputation. Under Contract
SBA-2761
Pennsylvania$4.3 million revenue. Home health, home care and hospice agency. 18% bottom line. Under Contract
SJL-7605
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
SBA-7440
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
SJL-3670
Texas$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place. Under Contract
SJL-6009
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
SJL-2228
Virginia$6 million Medicare certified agency in Northern Virginia. Under Contract
SBA-7366

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.

Another Cartoon Favorite from the New Yorker

 

     

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Home Health Index December 2017 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at rich@stoneridgepartners.com or (239) 561-0826 and toll-free 800-218-3944

Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Almost Family | Amedisys | LHC Group

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