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
ArizonaMedicare/Medicaid certified Home Health Agency. $1.8 million in annual revenue. 90% Medicaid/10% Medicare. Phoenix metropolitan area. Accredited. 5 star rating.Available
SBA-9188
California$6 million revenue. Hyrbid payor mix - 70% in network, 20% out of network, 10% private cash pay. Destination oriented treatment facility. 48 residential beds and 6 detox beds. JCAHO accredited. Beautiful property with more adjacent available for purchase. Tons of amenities.Available
SJD-2579
California$2+ million revenue. $550,000 net profit. 28 bed, 4 facilities. Full continuum of care treatment center in California. Growing quickly with a large wait list. 10 bed detox license. Gorgeous real estate for sale or lease. Great reputation and referrals. Available
SJD-8481
CaliforniaGrowing $1.9 million revenue. Private pay. Independently owned. Full staff in place. Available
SJL-4483
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
CaliforniaTrauma treatment facility. Searching for real estate partner to buy property and lease back, as well as further expansion. Great business plan and current growth and new contracts. Great results and outcomes. Available
SJD-6424
FloridaMedicare/Medicaid certified home health agency. $2.5 million annual revenue. 5-star. Accredited. District 10.Available
SBA-8305
Florida$2.5 million Medicare agency in Port St. Lucie. Great reputation and clinicals.Available
SCM-6191

FloridaPrivate pay home care agency. Approximately $1,000,000. in annual revenue. Medicare/Medicaid certification. Accredited. W-2 employees. District 8. Available
SBA-3041
FloridaMedicare certified home health agency. Approximately $400,000 in annual revenue. Accredited. District 7.Available
SBA-9008
FloridaMedicare certified home health agency. District 10. Census: Minimal. Accredited.Available
SBA-1233
FloridaMedicare certified home health agency. Accredited. Minimal census. District 3.Available
SBA-7932
Georgia$5 million annual revenue private duty agency. Metro Atlanta service area. Well-positioned for additional growth. Available
SBB-5907
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
Indiana$6 million annual revenue. Medicare/Medicaid home health agency. Serves Valparaiso and surrounding areas. CHAP accreditedAvailable
SBB-9361
Maryland/DC/VirginiaLarge Medicare & Medicaid home care agency. Poised for continued growth.Available
SBB-7499
Massachusetts$10+ million Medicare and Medicaid certified Home Health agency. Diverse payor sources. Strong Management in place.Available
SBA-6010
Minnesota$8 million Medicaid agency. Well-established in metropolitan service area with staff in place.Available
SBB-7085
New YorkLHCSA in New York metro area. $10 million annual revenue. Consistent growth year over year. Available
SBB-8249
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
OhioMedicare/Medicaid agency in Columbus area. $4.5 million annual revenue. Long-standing reputation in the community. Profitable.Available
SBB-9067
OhioSoutheastern Ohio. $3.5 million annual revenue. Diverse referral source mix.Available
SBB-4298
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-occuring, 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
PennsylvaniaPrivate duty, non-medical home care company. $9.9 million current annual run rate. Eastern Pennsylvania. Highly profitable. Strong management team in place.Available
SBA-1009
Pennsylvania$4.3 million revenue. Home health, home care and hospice agency. 18% bottom line. Available
SJL-7605
Southeastern US$9+ million revenue with 16% bottom line. Home health with multiple locations. Regional presence with high star ratings. Nationally recognized for excellent patient outcomes. Lots of opportunity for growth. Available
SJL-5558
Southeast/Midwest8 locations, 6 cities with over 100 employees. Mental health/Psych/Therapy/Counseling/School based/SUD IOP pilot. $4.5 million revenue. $750,000 EBITDA. Huge growth opportunity and great business, reputation, and numbers. Available
SJD-7830
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
SouthwestFull continuum campus setting treatment center in Southwest US. 200+ beds. In network. Census growing every month. Great reputation and valuable contracts. Numbers are very impressive and improving every day. Solid turnkey business.Available
SJD-1953
Texas$3+ million hospice agency based in Dallas/Fort Worth. Well established. Clinically clean and growing. Full staff in place. Available
SJL-6009
Texas$3 million all Medicaid Home Care company located in Houston, TX. 20%+ year over year revenue growth since 2016. Nice bottom line.Available
SJL-3670
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$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$450,000+ Medicare certified Dallas area home care company. Fully staffed & clean clinically.Available
SJL-3334
Texas165 patient pediatric home care company in Houston, TX. Diverse referral network. 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
Upper Midwest$7.6 million revenue. Profitable home health and hospice. JCAHO accredited. 4-star rating. Ranked as a top performer in agency outcomesAvailable
SJL-2770
Virginia$6 million Medicare certified agency in Northern Virginia. Available
SBA-7366
Virginia$2.3 million revenue Physical Therapy and Wellness operation. 95% cash pay. Potential to franchise Nationwide. 2018 EBITDA $257,000. Available
SCM-7368
Virginia$1.2 million private duty/private pay home health business in Northern Virginia. Located in one of the most affluent counties in the country where the elderly population growth is outpacing the nations.Available
SCM-1483
Washington DCOpportunity to establish a Medicare/Medicaid home health agency. Certificate of Need subject to regulatory approval. Rare offering. Available
SBB-6706
California$5 million revenue with $1.25 million EBITDA. Full continuum treatment center. 3 residential houses, 2 sober living and 1 outpatient. JCAHO certified. Private pay and out of network. Under Contract
SJD-4380
Colorado65 bed full continuum treatment center in Mountain West. #1 million EBITDA. Motivated seller seeking timely close. Great census and solid numbers.Under Contract
SJD-1453
Florida$9.5 million Home Health Agency located on Florida's East Coast. Very strong operationally, clinically, and financially. 99% of revenue comes from traditional Medicare. Under Contract
SCM-6925

FloridaMedicare certified home health agency. $4.7 million in revenue. Accredited. 4.5 stars. District 7. Great management team in place.Under Contract
SBA-8426
Florida$1.5 million non-skilled private duty home health business. Strong management team in place. District 1.Under Contract
SCM-1148
FloridaNon-skilled home care agency. $600,000 in annual revenue. Outstanding reputation and quality service. Key staff in place. District 5.Under Contract
SBA-3885
South Central US$24 million annual revenue. Home health/Home care agency with small hospice operation. Well diversified payor mix. Medicare certified Multi State agency. Accredited. Strong management team in place.Under Contract
SCJ-5009
Southwest$25 million in annual revenue. Provider of Waiver and ICF ID/DD Services. Statewide Platform. Strong management team. Excellent reputation for quality services. Under Contract
SBH-2042
TexasAlmost 100% Medicare. Texas based home health agency. $6+ million revenue. Extremely profitable. Perfect surveys with a 4-star rating and consistently ranked as a top agency in the country.Under Contract
SJL-5800
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$2.3 million Medicare revenue. 85% Traditional Medicare. Service area in 5 counties around Taylor County, as well as Region 2 & 9.Under Contract
SBA-3650

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

 

     

More

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

Please follow us on Facebook  and Linkedin