Voices: Ben Bogan, Partner, Stoneridge Partners

This article is sponsored by health care mergers and acquisitions (M&A) advisory firm Stoneridge Partners. In this Voices interview, Home Health Care News sits down with partner Ben Bogan and learns how the health care M&A market has shifted since the start of the COVID-19 pandemic, why some buyers have remained aggressive throughout the pandemic and why now is a good time to sell a home health care agency.

HHCN: In March, we interviewed your partner Joe Lynch in this series, just when COVID-19 was taking shape in the U.S. It was unclear at that point what impact the pandemic would have on health care M&A, but we have a clearer picture now. How has your outlook for buyers and sellers – and the insights you provide to them – changed these past four months?

Bogan: I don’t think the picture is much clearer now, because we’re still in the midst of dealing with COVID and so much is still up in the air and very fluid. The pandemic uncertainty made a number of buyers go on pause initially. I think they needed to stop, assess the situation and figure out what this was going to mean for them.

Most buyers we deal with are strategic. They needed time to focus their attention on their own operations. A lot of them put their M&A efforts on pause to work their way through the COVID situation and see how things played out before they were ready to get moving again.

Despite this, a smaller number of buyers decided to stay very aggressive during this time. They doubled down and committed to doing deals and because of that, we’ve seen a very active M&A space. It’s certainly been a smaller number of buyers, but they’ve accounted for significant activity.

Before this latest resurgence of COVID, I had many buyers who reached back out to say that they were ready to get moving again. They were ready to fill their pipelines and get deals going with the hopes of closing some transactions in 2020. Since those calls, we’ve seen a resurgence in the virus, so we’ll see if they’re rethinking their intentions at this point. Regardless, we still have a pool of buyers who are very aggressive.

 

For the aggressive buyers, is their aggressiveness combined with fewer buyers overall proving to be a winning strategy?

They’re getting deals done, but I think the real question is if those other buyers hadn’t paused their activity, would they have created a more competitive process? That’s an interesting question.

What I can tell you is that the aggressive buyers have full pipelines, are moving forward and getting deals done. Would they have fewer deals in their pipelines if the other buyers weren’t on pause? It’s hard to tell.

 

In light of what you’ve described, how are you advising sellers?

Keep in mind that not all sellers — and not all of our clients — look the same. They’re in different geographies, they’re in different service lines, they’re different sizes and they have different strengths. So, depending on their unique circumstances, the advice is always going to look different.

But in general, if you have a strong business and you’re interested in engaging with a potential buyer, COVID may impact negotiations but it isn’t necessarily a deal-breaker. I’m glad to discuss a seller’s specific situation to understand whether now would be a good time to engage in conversations with potential buyers.

 

You’re an attorney by education and training. What are the specific benefits of the legal background with regards to M&A health care transaction work?

A legal education provides a strong background of universal skills that help you operate in any industry including the M&A space, health care-related or not. It helps you develop strong writing and research skills to assist in understanding and managing complex issues. Regarding M&A work, my background helps me with negotiating terms and understanding legal documents.

 

What are smart sellers doing right now? What should they watch out for?

Owners should be focusing on providing quality care and surrounding themselves with good staff and advisors. They should focus not only in the business but on the business. Good financials are also key.

When it comes to a potential transaction, there are some things that are out of an owner’s control – geography, buyer interest at any particular time, etc. But if you’re running and building a strong business clinically and financially, with a strong team in place, there will always be interest from buyers.

And when the time comes, they should engage a good M&A advisor. The process is long, and an owner needs to continue to focus on their business without distraction. You’re looking at a six-to-12-month process, and you don’t want the business to falter during that time.

 

For potential sellers, is now a good time to sell?

The question should be, “Is now a bad time to sell?” There are certainly COVID-related issues impacting the M&A space, but as I said before, every situation is unique. Because of the aggressive buyers we discussed and the desire for buyers that were earlier on pause to get going again, we’re seeing a lot of deal activity.

 

But is it a good time?

Every situation is unique, but with active buyers, a market ripe for consolidation, and some experience with dealing with COVID under everyone’s belts, now might actually be a great time to consider selling. It’s certainly not a bad time to engage with potential buyers, or with advisors who can help you make sure your business is ready for a future transaction.

 

Editor’s note: This interview has been edited for length and clarity.

Stoneridge Partners is a national health care mergers and acquisitions advisory firm specializing in the brokerage of home care, home health, hospice and behavioral health companies. For more information about their services, contact their corporate office at 800-218-3944 or via email at [email protected]

The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact [email protected]

To view the original article please click here

 

Facebooktwitter
Read More

Home Health Index | 2020 SEPTEMBER UPDATE

[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” border_style=”solid” type=”legacy”][fusion_builder_row][fusion_builder_column type=”1_1″ type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”true” min_height=”” hover_type=”none” link=”” first=”true” border_sizes_top=”” border_sizes_bottom=”” border_sizes_left=”” border_sizes_right=””][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Growth of Home Health, Post-Acute Care Stocks Continues in August

After a strong surge in July, stock values for home health and post-acute care providers moderated but continued their upward trajectory in August according to the new Home Health and Post-Acute Care Indices from national healthcare mergers and acquisitions firm Stoneridge Partners.

The home health sector has continued its steady rebound from the spring’s coronavirus-related disruption, while operators in the broader post-acute care landscape have also made positive gains in the face of persistent headwinds. Overall, the Home Health Index (HHI) added to July’s gains by nearly 5% in August, and the Post-Acute Care Index (PAI) grew by almost 2% over the same period.

“While gains like those we saw in July are exciting, I think this month’s numbers tell an even better story,” said Stoneridge Partner President and CEO Rich Tinsley. “Large swings – even in a positive direction – can mean volatility, but sustained, incremental gains show some stabilization in the market. Home health providers have pretty much said their volumes have recovered to pre-COVID-19 levels — or even higher. I’m hopeful this means we’re back on track for consistent growth.”

The S&P 500 also showed improved performance, up more than 7% in August compared to the previous month.

Home Health Index

The Stoneridge Partners HHI tracks the stock values of Amedisys Inc. (Nasdaq: AMED) and LHC Group Inc. (Nasdaq: LHCG), two of the country’s largest home health providers. Amedisys and LHC Group both have their headquarters in Louisiana.

In August, Amedisys saw its stock value rise more than 3% over July’s results. LHC Group’s stock value saw even larger gains — improving nearly 7% on a month-over-month basis.

“Both companies announced some interesting moves in August,” Tinsley said. “LHC Group announced another joint venture, this time with University Health Care System. On its end, Amedisys beefed up its personal care network by teaming up with BrightStar Care, a huge home care franchise company.”

Year to date, the HHI is up more than 48%.

Post-Acute Care Index

The PAI combines Amedisys and LHC Group stock values with values for Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living Inc. (NYSE: BKD).

LHC Group and Amedisys helped to buoy the PAI in August, as Brookdale, Encompass Health and Addus all saw small dips in their stock values.

Birmingham, Alabama-based Encompass Health’s stock value was down just more than 4% in August compared to July, while Brentwood, Tennessee-based Brookdale’s stock value dropped less than a percent over that same period. Frisco, Texas-based Addus — which recently announced plans to exit the Nevada market due to Medicaid rate challenges — saw its stock dip almost 3% in August compared to the previous month.

But the strongest performance in the August PAI belonged to Eagle, Idaho-based The Pennant Group, which saw its stock value soar by almost 48% in August compared to July.

Quote Of The Month

“Many people living with serious medical illnesses also suffer from comorbid behavioral health issues,” according to a recent report from the Center to Advance Palliative Care (CAPC).

Read the Full Article Here: Providers Seek to Integrate Behavioral Health with Palliative Care

Articles Featuring Stoneridge

View our quarterly M&A webinars on current valuation trends, deal flow, and pertinent regulatory changes in home health, home care, hospice, ID/DD, and behavioral health industries. Visit the Speaker Series Webinar Library on our website.

Our Partner and Executive Vice President Benjamin Bogan discussed the current state of the health care M&A market in Home Health Care News.

Our Associate Partner Tony Siebel discusses the current state of the M&A market for Medication-Assisted Treatment Clinics in our most recent Stoneridge Q&A.

Traditions Health Acquires Physician’s Choice Hospice and Palladium Hospice. Our Partner and Executive Vice President Ben Bogan acted as sell side advisor to Palladium Hospice.

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 going back to 2002.

[visualizer id=”8359″]
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.[visualizer id=”8361″]

This graph displays HH Index performance since 2002.

[visualizer id=”8363″]
This graph compares the HH Index to the price of Addus stock (non-Medicare).[visualizer id=”8362″]

(Home Health Index September 2020 | Stoneridge Partners)

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

Company 8/31/20 1 mos change YTD change 8/31/19 8/31/18
Amedisys 241.9 +3.31% +45.55% 128.71 125.01
LHC Group 208.44 +6.83% +51.31% 118.5 98.93
HH Index* 225.17 +4.91% +48.16% 123.61 111.97
S&P 3505 +7.15% +8.49% 2926.46 2884
Addus 93.66 -2.85% -3.66% 87.98 64.90

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) 8/31/20 8/31/19 8/31/18
Amedisys 8210 4490 3980
LHC Group 6440 4130 3430
HH Index Total 14650 8620 7410
Addus 1390 1150 804


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

Company 8/31/20 8/31/19 8/31/18
Amedisys 416% 248% 252%
LHC Group 308% 203% 253%
HH Index Average* 362% 226% 253%
Addus 188% 203% 176%


Multiples of EV/EBITDA

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

Company 8/31/20 8/31/19 8/31/18
Amedisys 33.92 24.92 26.41
LHC Group 30.79 20.33 33.19
HH Index Average* 32.36 22.63 29.80
Addus 24.93 27.74 22.30

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

[visualizer id=”11962″]

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 for its reporting. (Home Health Index September 2020 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Jet Health Inc., a home health provider, acquired Carrington Hospice Care Inc.
  • Bristol Hospice acquired Irvine-based Remita Health, a hospice provider with six locations in Arizona.
  • Alleo Health System acquired Atlanta-based Angel Heart Hospice.
  • Actinium Healthcare Holdings – a Dallas, Texas-based private equity firm – acquired Central Home Health Services of Texas Inc.
  • Hometown Healthcare Management acquired Lane Nursing Home.

[/fusion_text][fusion_separator style_type=”default” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” sep_color=”#ad9863″ top_margin=”” bottom_margin=”” border_size=”” icon=”” icon_size=”” icon_circle=”” icon_circle_color=”” width=”” alignment=”center” /][fusion_title title_type=”text” rotation_effect=”bounceIn” display_time=”1200″ highlight_effect=”circle” loop_animation=”off” highlight_width=”9″ highlight_top_margin=”0″ before_text=”” rotation_text=”” highlight_text=”” after_text=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” content_align=”left” size=”1″ font_size=”” animated_font_size=”” fusion_font_family_title_font=”” fusion_font_subset_title_font=”” fusion_font_variant_title_font=”” line_height=”” letter_spacing=”” margin_top=”” margin_bottom=”” margin_top_mobile=”” margin_bottom_mobile=”” text_color=”” animated_text_color=”” highlight_color=”” style_type=”default” sep_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” margin_top_small=”” margin_bottom_small=””]

Exclusively Listed For Sale By Stoneridge Partners


Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us; Stoneridge Partners

[/fusion_title][fusion_code]W2FjYWRwX2xpc3RpbmdzXQ==[/fusion_code][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Home Health Index September 2020 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at [email protected] 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: Amedisys | LHC Group

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Facebooktwitter
Read More

Traditions Health, LLC, announced that it has acquired Physician’s Choice Hospice and Palladium Hospice and Palliative Care.  

COLLEGE STATION, TexasSept. 17, 2020 /PRNewswire/ — Traditions Health, LLC (“Traditions”), a multi-state hospice and home health provider, announced that it has acquired Physician’s Choice Hospice (“Physician’s Choice”) and Palladium Hospice and Palliative Care (“Palladium Hospice”).   These acquisitions will allow Traditions to provide a high quality of clinical care to a broader base of patients.

The acquisition of Physician’s Choice and its five locations in Oklahoma, alongside the recent acquisition of Faith Hospice, make Traditions a leading hospice provider in the state. “We are excited to be joining the Traditions family with its strong leadership team, highly regarded brand and leading Oklahoma industry position,” said Ginger Barsotti, Founder and President of Physician’s Choice.  “Building this company from the ground up has been one of the greatest joys of my life. This partnership will allow us to support our long-term growth initiatives, predicated on our rich history as a private company with a dedicated and loyal employee base.”

The acquisition of Palladium Hospice strategically strengthens Traditions’ footprint in the southeast.  In acquiring Palladium Hospice, Traditions is adding six locations in South Carolina and two in Mississippi.  Traditions is also bolstering its existing Georgia footprint. “We are proud to integrate our company’s experience and leadership into Traditions and helping them fortify their presence in the southeast. We look forward to joining the Traditions team,” said Diane Parker, CEO and President of Palladium Hospice.

As a leading provider of hospice and home health services, Traditions offers skilled nursing, therapy services, and both physical and spiritual end of life care. The announcement was made by Bryan Wolfe, the President and CEO of Traditions.  “I am extremely excited to expand our services to South Carolina and Mississippi and strengthen our existing presence in Oklahoma and Georgia. This is an enormous accomplishment for our organization, and we could not be more excited to welcome the employees and patients of both Physician’s Choice and Palladium Hospice into the Traditions family,” said Mr. Wolfe.

Infinity Capital Partners acted as the sell-side advisor to Physician’s Choice Hospice. Stoneridge Partners acted as the sell-side advisor to Palladium Hospice.

About Traditions Health
Headquartered in College Station, TX, Traditions Health is a leading provider of hospice care, home health care, consulting services and online policy manuals. The company provides care to over 3,250 patients across seven states. The company has recently been named to the 2020 Inc. Magazine’s Inc. 5000 list of fastest-growing businesses. Traditions Health is a portfolio company of Dorilton Capital. For more information, visit our website at www.traditionshealth.com.

About Dorilton Capital
Dorilton Capital is a private investment firm seeking to acquire, recapitalize and support the growth of middle market businesses across a range of industry sectors. Dorilton seeks control situations and prefers to partner with incumbent management to create value over the long term.  Please visit www.doriltoncapital.com.

For media inquiries or relevant opportunities, please contact [email protected]

SOURCE Traditions Health, LLC

Related Links

http://www.traditionshealth.com

Facebooktwitter
Read More

Stoneridge Q&A with Tony Siebel

Associate Partner Discusses the Current State of the M&A Market for Medication-Assisted Treatment Clinics

When we talk about medication-assisted treatment clinics, what do we mean?
Generally, medication-assisted treatment (MAT) clinics are outpatient clinics that work with patients who have challenges with the use of opioids. Typically, they offer comprehensive services such as counseling, therapy and prescriptions for medications that help patients manage their addiction to opioids. The cost of care provided by an MAT clinic is usually much less than full-continuum or residential substance abuse centers. These clinics employ a variety of service providers, from physicians to nurse practitioners to licensed clinical social workers (LCSWs).

 

Recent reports indicate that substance use is surging during the COVID-19 pandemic, and the stress of the pandemic is having negative effects on those suffering with substance use disorders. How are medication-assisted treatment providers responding? What does this mean for the future of medication-assisted treatment?
You know, at the beginning of the COVID pandemic, I had three transactions for MAT clinics that were in the due diligence phase – and our buyers got a little nervous with everything that was going on surrounding the quarantine. But after a few weeks of gathering data, they realized that the census in these clinics had actually gone up. Because of the quarantine, patients suffering from addiction were having a hard time getting their medications, they weren’t able to attend their regular support groups and meetings, and they had more time on their hands at home. MAT clinics were able to step into that void and really come through for a lot of patients in difficult times. Now, many of these clinics are healthier than they were even pre-COVID, and I predict a sustained increase in demand for their services. We’re also seeing some payers increasing their reimbursements right now, and I think that will continue because the patient demand will definitely be there.

 

What are some other effects the pandemic has had on MAT providers? Are there any silver linings?
In my recent conversations with several MAT clinic owners, they tell me the real silver lining of these challenging times has been the increased acceptance of telemedicine. Regulators were quick to realize that patients needed continued care, but that they’d likely be reluctant to come in and seek it in person, so they made the decision to strategically loosen some of the restrictions surrounding the use of telemedicine. It’s allowed the clinics to revamp their service delivery model while maintaining their regular levels of reimbursement, so it’s been very helpful.

 

What is the current state of the MAT mergers and acquisitions market?
I’d say the current state of the market is active and buyers are pretty aggressive, particularly regional private equity-backed players. Multiples are really strong right now and valuations are high as compared to other healthcare entities. And I don’t see that going away anytime soon – we’re in what I would call the first wave of consolidation in the industry, and a lot of owners are recognizing that it’s the right time to make an exit. We’re also seeing a push in some states for insurers to play a bigger role in field of medication-assisted treatment, which is standardizing how clinics operate and encouraging them to move away from cash payments to Medicaid and insurance. That transition may be more than some small operators will want to take on, which will fuel the consolidation even further.

 

What kind of treatment providers are most attractive in the market right now – higher-end, out-of-network providers? Lower-cost community-based treatment models? Residential? Non-residential?
Generally, addiction treatment is moving away from out of network, high-luxury, residential or full continuum of care treatment to an outpatient model. The cost of care is just so much less than a residential treatment setting, and many MAT patients have Medicaid as their payer source, so an effective treatment where patients get regular medications and counseling but can remain at home is attractive.

 

Who is buying in the MAT market right now?
There really aren’t any national players in the market at this point, but there are several large regional players with private equity support behind them who are very active in this space. The buyers I’m seeing are often current clinic owners who are seeking to grow their footprint by consolidating operations, or folks who don’t necessarily want to start a new clinic from scratch, but know they can buy an existing clinic, operate it and expand it on their own.

 

What do you see for MAT market activity for the rest of 2020 and beyond?
I think we’ll see the MAT market continue to be very strong. As I said before, we’re seeing multiples in the six to eight range, versus other industries where they’re somewhere around five to six. I would bet on that continuing into next year.

 

If someone is thinking about selling their MAT clinic in the next 6-12 months, what should she/he be doing to prepare in the short and long-term?
I’d say spend some time figuring out what is really important to you – do you want to sell your clinic and leave the industry altogether, sell and hope to stay on with the new owner, or partner with another clinic and grow your business? Know what your goal is. Then, get your financial house in order. Make sure all your taxes are filed and your financials are buttoned up and reflective of the true state of your business. Finally, speak to an advisor who has experience in the field. No matter where you are in your planning process for the future, it’s never too early to establish a relationship with a specialist who knows this space and can keep your interests in mind as they monitor broader industry developments.

Facebooktwitter
Read More

Home Health Index | 2020 AUGUST UPDATE

[fusion_builder_container hundred_percent=”no” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” overlay_color=”” video_preview_image=”” border_size=”” border_color=”” border_style=”solid” padding_top=”” padding_bottom=”” padding_left=”” padding_right=””][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” border_position=”all” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” center_content=”no” last=”true” min_height=”” hover_type=”none” link=”” first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

July Home Health, Post-Acute Care Stocks Rebound, Showing Highest Gains in Months

There’s good news for both home health and post-acute care stock values according to the latest Home Health (HHI) and Post-Acute Care (PAI) indices from national healthcare mergers and acquisitions firm Stoneridge Partners.

The HHI continued its upward trajectory after last month’s positive results, soaring more than 15% in July. And after taking a tumble last month, the PAI picked up some steam and improved by an impressive 10% over June’s results. The S&P, comparatively, rose about 5.5% from June to July.

“I think this shows that with time, home health and post-acute companies are adjusting as best they can to COVID-19,” said Stoneridge Partners President and CEO Rich Tinsley. “They’ve been able to secure some more PPE and make sure their protocols are operating effectively. I also think there’s a greater need for their services, and patients are less hesitant to access them. That bodes well for these companies.”

Home Health Index

The Stoneridge Partners HHI follows the stock values of Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG).

In July, Amedisys stock values jumped nearly 18% over June, while LHC Group stock ticked up nearly 12%. These strong performances pushed the HHI up nearly 15% — its biggest one-month improvement since November of 2019.

Even with the financial turmoil that has roiled the U.S. economy since the beginning of the year, the HHI has posted a year-over-year increase of more than 66%.

“All of us in the healthcare industry have known for years that home health is a critical component in the spectrum of care resources,” Tinsley said. “The pandemic seems to have shone an even brighter light on the importance of the work home health providers do.”

Post-Acute Care Index

 Stoneridge also tracks stock values for leading post-acute care companies in its PAI.

Along with Amedisys and LHC Group, the PAI also includes Addus HomeCare Corporation (Nasdaq: ADUS), The Pennant Group, Inc. (Nasdaq: PNTG), Encompass Health Corp. (NYSE: EHC) and Brookdale Senior Living (NYSE: BKD).

While the PAI’s July performance didn’t best the HHI, the 10% month-over-month increase is welcome news after last month’s 3% decline.

Stock values for Birmingham, Alabama-based Encompass — which operates a mix of inpatient rehabilitation hospitals, home health and hospice agencies — jumped nearly 10% between June and July. Meanwhile, Eagle, Idaho-based Pennant Group recorded an increase of nearly 11% during the same period. Pennant operates home health, hospice and senior living businesses. Additionally, Frisco, Texas-based Addus, which focuses on Medicaid home-based care, saw its stock prices tick up more than 4% last month.

Brentwood, Tennessee-based Brookdale was the only company in the PAI to trend downward between June and July. The company, focused largely on the senior living community model, saw its stock values fall just over 6%. Still, that’s a marked improvement over last month’s performance when Brookdale’s stock plummeted more than 19%.

“It’s no surprise that post-acute care companies offering home-based care are faring better than those with a less diversified portfolio of services during the pandemic,” Tinsley said. “Congregate living facilities have worked incredibly hard to avoid coronavirus outbreaks in their facilities, but it’s a much more challenging environment and I think the current stock values reflect that.”

Quote Of The Month

“Hospitals have been given permission — for patients that were actively in an outpatient [setting] for that facility — to send them to outpatient therapists by way of telehealth into patients’ homes.” – National Association for Home Care & Hospice (NAHC) President William A. Dombi

Read the Full Article Here: Dombi: Regulatory Flexibilities: Mean More Competition for Home Health Providers

Articles Featuring Stoneridge

Join our quarterly M&A webinar on current valuation trends, deal flow, and pertinent regulatory changes in home health, home care, hospice, ID/DD, and behavioral health industries. Sign up here: Webinar Registration

Stoneridge Partners has a new updated website. Visit it here: Stoneridge Partners

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • 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 going back to 2002.

[visualizer id=”8359″]
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.[visualizer id=”8361″]

This graph displays HH Index performance since 2002.

[visualizer id=”8363″]
This graph compares the HH Index to the price of Addus stock (non-Medicare).[visualizer id=”8362″]

(Home Health Index August 2020 | Stoneridge Partners)

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

Company 7/31/20 1 mos change YTD change 7/31/19 7/31/18
Amedisys 234.16 +15.21% +40.89% 135.06 106.62
LHC Group 195.11 +10.66% +41.63% 123.51 91.15
HH Index* 214.64 +13.14% +41.23% 129.29 98.89
S&P 3271.12 +5.22% +1.25% 2980.38 2822.74
Addus 96.41 +3.99% -0.83% 81.05 67.05

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) 7/31/20 7/31/19 7/31/18
Amedisys 7740 4770 3100
LHC Group 6390 4370 3010
HH Index Total 14130 9140 6110
Addus 1350 1020 634


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

Company 7/31/20 7/31/19 7/31/18
Amedisys 393% 263% 201%
LHC Group 306% 216% 272%
HH Index Average* 350% 240% 237%
Addus 226% 186% 149%


Multiples of EV/EBITDA

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

Company 7/31/20 7/31/19 7/31/18
Amedisys 31.99 26.49 22.41
LHC Group 30.58 22.83 30.17
HH Index Average* 31.29 24.66 26.29
Addus 34.98 24.84 19.51

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

[visualizer id=”11962″]

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 for its reporting. (Home Health Index August 2020 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Providence Treatment, an outpatient addiction treatment provider with three locations in the Greater Philadelphia area, has acquired Main Line Recovery, an outpatient facility in Haverford, Pennsylvania, offering comprehensive assessment for behavioral health concerns and psychotherapy for individuals, couples, families and groups.
  • The Pennant Group Inc. announced that it has purchased two home health agencies with multiple locations throughout southeastern Idaho and northern Utah.

[/fusion_text][fusion_separator style_type=”default” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” sep_color=”#ad9863″ top_margin=”” bottom_margin=”” border_size=”” icon=”” icon_size=”” icon_circle=”” icon_circle_color=”” width=”” alignment=”center” /][fusion_title title_type=”text” rotation_effect=”bounceIn” display_time=”1200″ highlight_effect=”circle” loop_animation=”off” highlight_width=”9″ highlight_top_margin=”0″ before_text=”” rotation_text=”” highlight_text=”” after_text=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” content_align=”left” size=”1″ font_size=”” animated_font_size=”” fusion_font_family_title_font=”” fusion_font_subset_title_font=”” fusion_font_variant_title_font=”” line_height=”” letter_spacing=”” margin_top=”” margin_bottom=”” margin_top_mobile=”” margin_bottom_mobile=”” text_color=”” animated_text_color=”” highlight_color=”” style_type=”default” sep_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Exclusively Listed For Sale By Stoneridge Partners


Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us; Stoneridge Partners

[/fusion_title][fusion_code]W2FjYWRwX2xpc3RpbmdzXQ==[/fusion_code][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Home Health Index August 2020 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index”. Rich can be reached at [email protected] 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: Amedisys | LHC Group

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Facebooktwitter
Read More

Available Opportunities 7/23/2020

AGENCIES FOR SALE

NEW PENNSYLVANIA: Stoneridge File #SBA-5618
  • Medicare-certified home health agency
  • Licensed to service Chester, Berks, Lancaster, and Delaware counties
  • ACHC-accredited
  • Minimal census of 20+/- patients
  • $4.9 million Medicare home health agency in Phoenix
  • Showing nice year-over-year revenue growth since 2018
  • Diverse referral sources, well run with complete staff in place
  • $11 million multi-location addiction treatment center
  • Located in Southern California
  • 21% bottom line
  • Strong growth trends
  • JCAHO accredited
  • $5+ million home health, home care, case management, and hospice company
  • Approximately 15% revenue from hospice, other service line revenues distributed relatively evenly
  • Multiple locations
  • Diverse payor sources
  • Hospice accreditation
  • Projected PDGM Impact of 30%+ for home health
Facebooktwitter
Read More
Facebooktwitter
Call Now Button(814) 723-9000