December 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]
Quote of the Month:

Anthony April  Encompass  JLD 6553
“The evolving health care delivery system is going to be characterized by larger, integrated health care providers offering a full range of services on a coordinated and comprehensive basis.”
– Jay Grinney, HealthSouth president and CEO, in discussing their recent proposed acquisition of Encompass.
“Opportunities were strong, so it was time to create that next transaction.”
– April Anthony, CEO and founder of Encompass.  A nice smile on her face with the announcement of the $750 million dollar sale!

 

The Stoneridge Partners Home Health Index (HH Index) Falls

Our HH Index has been fluctuating over the past few months which seems to paint a picture of a home health market with no clear direction.   While our Stoneridge Partners Home Health Index fell more than 3%, the S&P 500 rose 2.45%, which was a near 6% difference in one month alone.  All stocks in our index were down for the month.

The big news this past month was the blockbuster announcement that HealthSouth would acquire Encompass Home Health for $750 million.  Revenue for  2013  was reported as $256 million.  More on this later in the column.

The high for our HH Index was set in September, 2008 at 41.75.  We now rest at 23.99.

Here are this month’s results:

Company 11/30/14 10/31/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 27.61 29.44 -6.22% -14.60% -1.04%
Amedisys 25.42 26.1 -2.61% +73.75% +56.14%
Gentiva* 19.41 19.70 -1.47% +56.41% +57.17%
LHC Group 23.51 24.35 -3.45% -2.20% -1.01%
HH Index 23.99 24.90 -3.65% +15.03% +19.52%
S&P 500 2067.56 2018.05 +2.45%% +11.86% +14.49%
Addus 23.08 19.87 +16.16% +2.81% -20.41%

*The purchase price of the Kindred-Gentiva transaction was set at $19.50 per share.

We continue to have a very mixed picture in stock prices, with both Almost Family and LHC Group down from one year ago, while Amedisys and Gentiva  show strong increases.

Addus, a public home care company not in our index, made a nice comeback after the release of their third quarter numbers, which showed a 21% increase in revenue.  Addus is not included in our index because the majority of their revenue does not come from Medicare reimbursement.

Below is a chart comparing Addus and our HH Index over the past two years.  Addus is primarily a non-Medicare company while the stocks in our index are primarily Medicare reimbursed. It might appear that Addus, as a non-Medicare company, had been lagging behind the primarily Medicare companies, however this past month they made a nice comeback.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-addus.html” width=”604″ height=”450″ scrolling=”no”]

PERCENT OF REVENUE & MULTIPLE OF EBITDA:

It is interesting to note the change over the past year in multiples of EBITDA and percentage of selling price to revenue.

Selling Price (Enterprise Value) as a Percent of Revenue. What a difference a year makes!

12/1/2014 12/1/2013
Almost Family 66% 59%
Amedisys 80% 40%
Gentiva 89% 71%
LHC Group 69% 64%
HH Index Average 76.0% 58.5%
Addus 81% 93%

Note that the purchase price of the Kindred-Gentiva transaction is approx. $1.8 billion.  Based on Gentiva’s second quarter annualized revenue of about $2 billion this works out to around 90% of revenue.  It appears that the other public companies are slowly catching up.

MULTIPLES OF EV/EBITDA. Think of this as price as a multiple of EBITDA.

12/1/2014 12/1/2013
Almost Family 14.04 9.15
Amedisys 18.54* 10.08
Gentiva 11.4 7.44
LHC Group 8.58 6.82
HH Index Average 13.1 8.37
Addus 12.06 13.19

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 November 30. 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.

* The spike in multiple of EBITDA for Amedisys may be a result of recently announced increased earnings. It seems that the stock trades on current earnings but the multiple of EBITDA is calculated on a trailing twelve months.

IN THE NEWS:

HealthSouth-Encompass:  On Monday, November 24th we were surprised to learn that HealthSouth will purchase Encompass Home Health for $750 million or about 9.5 times EBITDA, including a $40 million tax credit. Based in Birmingham, Alabama, HealthSouth (HLS-NYSE) operates inpatient rehabilitation facilities and generates over $2 billion in revenue.

Founded in 1998 and based in Dallas, Texas, Encompass is the fifth largest provider of Medicare-focused, skilled home health services in the United States. It operates in 140 locations across 13 states. Encompass is currently owned by Cressey & Company LP, a leading healthcare-focused private investment firm.

We noted last month that the Wall Street Journal had reported that Cressey was selling Encompass (and Hospice Compassus), so the sale itself was no surprise.  The surprise was the price.  As a percentage of revenue it set a new bar.

While Kindred is on contract to buy Gentiva for about one times revenue, HealthSouth is on contract to buy Encompass for what looks like over two times revenue.  Why the difference.  It’s all about the bottom line…always has been.  Both are being sold for around ten times EBITDA.

From the press releases it looks like HealthSouth will be keeping April Anthony and her management staff on board, which should make for a smooth transition.

Kindred-Gentiva: There has been very little news on the proposed Kindred purchase of Gentiva.  Closing, the last we heard, is scheduled for the first quarter of 2015.  Given the somewhat acrimonious press releases during the initial negotiations (poison pill, we will not be deterred, opportunistic, etc) one cannot help but wonder how that transition will go.

ALMOST FAMILY – TAKING A CLOSER LOOK

Third quarter numbers (000s) 

2014 2013 Difference % Change
Revenue
   Visiting Nurse* 97,845 67,455 +30,380 +45.0%
   Personal Care* 25,907 21,016 +4,891 +23.3%
     Total Rev 123,742 88,471 +35,271 +39.9%
Gross Profit
   Visiting Nurse 49,208 34,488 14,720 +42.7%
   % GP 50.3% 51.1% -0.8 -1.57%
  Personal Care 8,048 6,608 +1,440 +21.8%
   % GP 31.1% 31.4% -0.3 -0.96%
    Total GP 57,255 41,096 +16,159 +39.3%
    Total GP % 46.3% 46.5% -0.20 -0.43%
G&A* 49,891 37,308 12,583 +33.7%
Operating Income 7,364 3,788 3,576 +94.4%
Adjusted EBITDA 10,496 5,728 +4,768 +83.2%
Stock Price 9/30 27.17 19.43 +7.74 +39.8%

* Visitng Nurse Revenue consists primarily of Medicare skilled care.  Personal Care consists primarily of non-skilled community based programs.

For comparison purposes  approx. $34.0 million of their $35.3 million year over year increase in revenue was a result of their acquisition of SunCrest.  At the time of the acquisition it was announced that the annual revenue of SunCrest was $155 million, which works out to about $39 million per quarter.  At first this might look like a substantial decrease in SunCrest revenue post acquisition, however given that there was a great deal of over-lap in certain markets like Florida and that they only paid about 50% of revenue, this looks pretty good.

GRAPHS: This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through November, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point. For the past decade, it’s been quite a ride)

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index
This second chart 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 November, 2002. It has been quite a ride.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]
Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 November, 2014.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

MERGER & ACQUISITION ACTIVITY:

SOLD….by Stoneridge Partners:

Dallas, Texas: Epic Health Services, Inc., a leading provider of home health services, and Nurses to Go, Inc., a prominent provider of pediatric and adult private duty and home health care services in Missouri, have announced the closing of a definitive agreement under which Epic has acquired Nurses to Go.  Cory Mertz, one of our partners, provided sell-side advisory services.

Other Transactions:

Providence, Rhode Island:  Nautic Paartners, LLC announced that it has partnered with management to acquire All Metro Health Care Services, Inc. (“All Metro”). All Metro is a leading provider of home and community based services in New York, New Jersey and Florida. All Metro was founded in 1955 and is headquartered in Lynbrook, NY.

Lafayette, Louisiana: LHC Group (NASDAQ:LHCG) announced that it has entered into a three party home health joint venture with Southeast Alabama Medical Center (SAMC) and Troy Regional Medical Center in the Certificate of Need (CON) state of Alabama. The service area includes seven counties with a population of 415,000.

HEARD ON THE STREET:

Last month we noted that, in addition to Encompass, Cressey & Company was also planning on selling another home health portfolio company, Hospice Compassus, Inc.   It now appears that that transaction is going forward.

We have heard that Formation Capital, along with the Audax Group, Health Care REIT, Inc., National Hospice Holdings and Safanad, Ltd have formed a holding company, FTC Holdings, to acquire Hospice Compassus.

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • New Jersey – $4 million private duty agency.  Primary payor is Medicaid, and the agency enjoys very good relationships with many referral sources.  Stoneridge file #S-6700
  • Jacksonville, FL – $2 million revenue Medicare home care agency based in Jacksonville.  Well established with strong management team in place.  Diverse referral base.  Stoneridge file S-4159
  • New Jersey – $4 million hospice serving southern New Jersey, well-established with a great reputation for quality care.  Stoneridge file S-1070
  • Massachusetts – Five year old agency selling the Medicare certified provider number only, with no patients. Available immediately.  Stoneridge file S-7050
  • Utah – $10 million home health and hospice provider with multiple office locations. Good platform or add-on opportunity, motivated seller.  Stoneridge file S-2262
  • Florida – $2.8 million Medicare certified agency serving District 3. Solid operational team in place. 95% Medicare.  Stoneridge file S-9000
  • New Mexico – $2.3 million Medicare provider serving the Roswell area. Clean surveys.  Stoneridge file S-5295
  • Arizona – $2 million hospice located in large Metropolitan area.  Clean surveys and no CAP issues.  Stoneridge file S-6210.
  • Arizona – very low census Medicare agency in the Phoenix metro area.  Accredited.  Stoneridge file #S-2010
  •  Michigan – $2.2 million revenue behavioral health company providing Medicaid waiver services in group homes. Great relationship with referral sources.  Stoneridge file #S-1066.
  • llinois – Profitable $5.5 million revenue Medicare home care and hospice serving the northern Chicago MSA.  Mature management team in place, a diverse referral base and strong outcomes — exceeding state and national averages on 15 of 22 quality measures as measured by Medicare’s “home health compare”.  Stoneridge file S-5288. On Contract
  • Ohio– $2.2 million revenue run rate diversified agency in central Ohio.  Private pay and both Medicare & Medicaid certified to serve both dual eligible and managed care populations.  Excellent outcomes.  Stoneridge file S-5276.
  • West Texas – $3.5 million Medicare agency established in 1995.  Stoneridge file S-5279.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Florida – Orlando area Medicare agency with about $900,000 revenue.  Stoneridge file S-2540.  ON CONTRACT
  • Ohio – $11 million Ohio Medicaid Provider.  Experienced management team will stay with new owner.  Stoneridge file S-5283. ON CONTRACT
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.  SOLD
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file S-4250.
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric services, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file S-5231.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • California – $8.3 Million Private Duty and Medicare Provider.  Predominately a private duty provider, this agency also operates a small, but significant, Medicare operation, making it a unique opportunity.  Owner will consider selling the business lines separately.  Stoneridge file S-3098.
  • California – Los Angeles Medicare, Medi-Cal and private pay skilled care provider.  They have a long history in the local community and top-notch management that is willing to stay with a new owner.  Stoneridge file S-3000.
  • California – $5 million Hospice agency east of Los Angeles, profitable with clean surveys.  Stoneridge file S-3037
  • New Mexico – Private pay home care and care management agency with annual revenue approaching $1 million.  Stoneridge file S-5450
  • California – $3 million Santa Barbara Medicare agency, very motivated seller invites all offers.  Stoneridge file S-3098M

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.

A favorite cartoon from the New Yorker

http://www.technologyinvestor.com/wp-content/uploads/2014/11/sheep.jpg

MORE:  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: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] –  800-218-3944

Previous editions of this monthly newsletter can be searched for below.    Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

November 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month:

“The company needed a clear path forward”   Benjamin A. Breier, at 43, the new CEO of Kindred, speaking of the proposed acquisition of Gentiva.

The Stoneridge Partners Home Health Index (HH Index) up over 14%.

After taking a minor dip last month the Stoneridge Partners’ Home Health Index (HH Index) jumped over 14%, while the S&P 500 was up only 2.8%.

This nice increase may have been the result of another stellar quarter from Amedisys, going from a loss one year ago to over $16 million in operating income in the third quarter.  Their stock is now up 78% YTD.

The high for our HH Index was set in September, 2008 at 41.75.  We now sit at 24.90, a level not seen since June, 2011.

Here are this month’s results:

Company 10/31/14 9/30/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 29.44 27.17 +8.35% -8.94% +53.09%
Amedisys 26.10 20.17 +29.40% +78.40% +60.32%
Gentiva* 19.70 16.78 +17.40% +58.74% +72.50%
LHC Group 24.35 23.2 +4.96% +1.29% +18.20%
HH Index 24.9 21.83 +14.05% +19.40% +47.48%
S&P 500 2018.05 1963.25 +2.79%  +9.18% +14.89%
Addus 19.87 19.60 1.38% -11.49% -23.13%

*The purchase price of the Kindred-Gentiva transaction was set at $19.50 per share.

Almost Family remains the only stock that is down YTD, but looking back one year all are up nicely.

Addus, a company that is not a part of our HH Index, is now down 23% from one year ago.  From the spring of 2013 their stock went on a tear, just about tripling in price.  This is a very well run company that may be under-valued.

Here is a chart comparing Addus and our HH Index over the past two years.  Addus is primarily a non-Medicare company while the stocks in our index are primarily Medicare reimbursed. It might appear that Addus, as a non-Medicare company, if now lagging behind the primarily Medicare companies included in our HH Index

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-addus.html” width=”604″ height=”450″ scrolling=”no”]

PERCENT OF REVENUE & MULTIPLE OF EBITDA:

But more importantly, when checking back one year ago to the multiples of EBITDA and percentage of selling price to revenue we see big changes.

Selling Price (Enterprise Value) as a Percent of Revenue. What a difference a year makes!

11/1/2014 11/1/2013
Almost Family 75% 43%
Amedisys 82% 42%
Gentiva 95% 65%
LHC Group 74% 60%
HH Index Average 81.5% 52.5%
Addus 69% 93%

Note that the purchase price of the Kindred-Gentiva transaction is approx. $1.8 billion.  Based on Gentiva’s second quarter annualized revenue of about $2 billion this works out to around 90% of revenue.  It appears that the other public companies are slowly catching up.

MULTIPLES OF EV/EBITDA. Think of this as price as a multiple of EBITDA.

11/1/2014 10/1/2013
Almost Family 18.09* 5.79
Amedisys 18.97** 7.82
Gentiva 12.53 6.41
LHC Group 9.08 6.26
HH Index Average 14.66 6.57
Addus 10.60 12.30

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 October 31.

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.

* The spike in EBITDA for Almost Family may be a result of their 4th quarter acquisition of $150M Suncrest.

** The spike in multiple of EBITDA for Amedisys may be a result of recently announced increased earnings. It seems that the stock trades on current earnings but the multiple of EBITDA is calculated on a trailing twelve months.

IN THE NEWS:

Gentiva-Kindred:  After last month’s announcement that the Kindred-Gentiva transaction is going forward, there has not been much news on that front.  The final closing to take place in the first quarter of 2015.

The purchase price is $1.8 billion.  They anticipate revenue of combined entities of approx. $7.1 billion with operating income of $1 billion.  Synergies of $70 million in cost savings are expected within two years.

According to their press release, this will make their combined company the largest provider of rehabilitation, home health and hospice services in the country.  They will operate within the “Kindred at Home” division and be based in Louisville, however they will keep a significant regional presence in Atlanta, where Gentiva is based.

Amedisys, third quarter results, in 000s: 

2014 2013 Difference % Change
Revenue
   Home Health 237,200 236,800 +400 +0.17%
   Hospice 63,100 64,500 -1,400 -2.17%
     Total Revenue 300,281 301,285 -1,004 -0.33%
Gross Profit
  Home Health 99,800 96,100 +3,700 +9.18%
42.07% 40.58% +3.68%
  Hospice 30,300 30,000 +300 1.00%
48.0% 46.5% +3.24%
    Total GP 130,122 126,052 +4,070 +3.23%
G&A* 113,875 130,378 -16,504 -12.7%
Operating Income 16,248 -4,326 20,574

* For comparison purposes G&A does not include a $150M DOJ settlement that was made in 3rd quarter 2013.

It is interesting to note that, while total revenue was down slightly, gross profit was up over 3%.  That, along with expenses being slashed by over $16M, resulted in a nice increase in income resulting in a nice pop in their stock price.

GRAPHS: This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through October, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point. For the past decade, it’s been quite a ride)

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index
This second chart 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 November, 2002. It has been quite a ride.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]
Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 October, 2014.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

MERGER & ACQUISITION ACTIVITY:

SOLD….by Stoneridge Partners:

  • Ft. Worth, Texas: Covenant Hospice and Palliative Care merged with a national hospice provider.  Cory Mertz, one of our partners, provided sell-side advisory services.
  • Columbus, Georgia:   Freedom Home Care recently sold to a national human resource provider.  Brian Bruenderman, one of our partners, provided sell-side advisory services.

Other Transactions From Around the Country

  • Atlanta, Georgia: Halcyon Healthcare, a portfolio company of Health Evolution Partners and parent of Halcyon Hospice has acquired Community Hospice of Mississippi, headquartered in Tupelo, MS.
  • Glendale , Calif:  Apollo Medical Holdings, an integrated physician-centric healthcare delivery company, announced the launch of a new subsidiary, Apollo Palliative Services, with the acquisition of majority stakes in both a hospice agency and a home health company.
  • Chicago, Illinois: Accelera Innovations, Inc. (“Accelera”) announced that they have closed on the acquisition of SCI Home Health, Inc (d/b/a Advance Lifecare Home Health) (“SCI”).
  • Livonia, Michigan: Hospice Advantage announced their acquisition of  Sanctuary Hospice of Michigan.

Heard on the Street:

  • In an article from Dow Jones, Cressey & Co.is putting up Hospice Compassus, Inc. for sale which could fetch $300 million, said three people familiar with the situation.
  • In an article in the Wall Street Journal, Amy Or reports that “Cressey & Co is selling Encompass Home Health, Inc. in an auction process in the hope of fetching $700 million for the provider of at-home nursing services.”

How about two for a billion!

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Jacksonville, FL – $2 million revenue Medicare home care agency based in Jacksonville.  Well established with strong management team in place.  Diverse referral base.  Stoneridge file S-4159
  • New Jersey – $4 million hospice serving southern New Jersey, well-established with a great reputation for quality care.  Stoneridge file S-1070
  • Utah – $10 million home health and hospice provider with multiple office locations. Good platform or add-on opportunity, motivated seller.  Stoneridge file S-2262
  • Florida – $2.8 million Medicare certified agency serving District 3. Solid operational team in place. 95% Medicare.  Stoneridge file S-9000
  • New Mexico – $2.3 million Medicare provider serving the Roswell area. Clean surveys.  Stoneridge file S-5295
  • Arizona – $2 million hospice located in large Metropolitan area.  Clean surveys and no CAP issues.  Stoneridge file S-6210.
  •  Michigan – $2.2 million revenue behavioral health company providing Medicaid waiver services in group homes. Great relationship with referral sources.  Stoneridge file #S-1066.
  • llinois – Profitable $5.5 million revenue Medicare home care and hospice serving the northern Chicago MSA.  Mature management team in place, a diverse referral base and strong outcomes — exceeding state and national averages on 15 of 22 quality measures as measured by Medicare’s “home health compare”.  Stoneridge file S-5288.
  • Ohio– $2.2 million revenue run rate diversified agency in central Ohio.  Private pay and both Medicare & Medicaid certified to serve both dual eligible and managed care populations.  Excellent outcomes.  Stoneridge file S-5276.
  • West Texas – $3.5 million Medicare agency established in 1995.  Stoneridge file S-5279.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Florida – Orlando area Medicare agency with about $900,000 revenue.  Stoneridge file S-2540.  ON CONTRACT
  • Ohio – $11 million Ohio Medicaid Provider.  Experienced management team will stay with new owner.  Stoneridge file S-5283. Under Contract
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.  SOLD
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file S-4250.
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric services, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file S-5231.
  • Minnesota – Medicaid home care agency.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge file S-5268.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • California – $8.3 Million Private Duty and Medicare Provider.  Predominately a private duty provider, this agency also operates a small, but significant, Medicare operation, making it a unique opportunity.  Owner will consider selling the business lines separately.  Stoneridge file S-3098.
  • California – Los Angeles Medicare, Medi-Cal and private pay skilled care provider.  They have a long history in the local community and top-notch management that is willing to stay with a new owner.  Stoneridge file S-3000.
  • California – $5 million Hospice agency east of Los Angeles, profitable with clean surveys.  Stoneridge file S-3037
  • New Mexico – Private pay home care and care management agency with annual revenue approaching $1 million.  Stoneridge file S-5450
  • California – $3 million Santa Barbara Medicare agency, very motivated seller invites all offers.  Stoneridge file S-3098M

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.

Finally some good news..From the New Yorker EverythingisCharged

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] –  800-218-3944

Previous editions of this monthly newsletter can be searched for below.    Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

October 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Hot Off the Press:

Kindred Healthcare, Inc. and Gentiva Health Services, Inc.  announced that they  have entered into a definitive merger agreement under which Kindred will acquire all of the outstanding shares of Gentiva common stock for $19.50 per share in a combination of cash and stock.  The transaction is valued at $1.8 billion.  For full press release click here

Quote of the Year

We go back to the prescient quote a few months ago from Paul Diaz, CEO of Kindred regarding their proposed purchase of Gentiva:

“We will not be deterred.  We are determined to pursue the proposed combination of Kindred and Gentiva and are committed over the long term to achieving our objective.”  

Clearly he was serious.

The Stoneridge Partners Home Health Index (HH Index) down 5.8%.

After four straight months of increases,  our HH Index finally took a dip.  This mirrored the stock market in general with the S&P 500 down 2%.  This drop seems to be continuing, perhaps reflecting the bad news we get in our evening broadcasts…slow down in Europe and China, Ebola, ISIS….etc, etc.

The high for our HH Index was set in September, 2008 at 41.75.  We now sit at 21.83.

Here are this month’s results:

Company 9/30/14 8/31/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 27.17 27.98 -2.89% -15.96% +39.84%
Amedisys 20.17 20.92 -3.59% +37.87% +17.20%
Gentiva* 16.78 18.07 -7.14% +35.21% +39.37%
LHC Group 23.2 25.74 -9.87% -3.49% -1.11%
HH Index 21.83 23.18 -5.81% +4.69% +21.04%
S&P 500 1963.25 2003.37 -2.00%  +6.22% +16.75%
Addus 19.60 21.90 -10.50% -12.69% -32.34%

*The purchase price of the Kindred-Gentiva transaction was $19.50 per share.

It is interesting to note that YTD both Almost Family and LHC Group are down while Amedisys and Gentiva are up…. substantially, but looking back one year all are up nicely with the lone exception of LHC Group.

Addus, a company that is not a part of our HH Index, is now down 32% from one year ago.  From the spring of 2013 their stock went on a tear, just about tripling in price.  This is a very well run company that may be under-valued.

Here is a chart comparing Addus and our HH Index over the past two years.  Addus is primarily a non-Medicare company while the stocks in our index are primarily Medicare reimbursed. The two have crossed.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-addus.html” width=”604″ height=”450″ scrolling=”no”]

PERCENT OF REVENUE & MULTIPLE OF EBITDA:

But more importantly, when checking back one year ago to the multiples of EBITDA and percentage of selling price to revenue we see big changes.

Selling Price (Enterprise Value) as a Percent of Revenue. What a difference a year makes!

10/1/2014 10/1/2013
Almost Family 69% 43%
Amedisys 66% 43%
Gentiva 89% 65%
LHC Group 69% 68%
HH Index Average 73.3% 54.8%
Addus 70% 107%

Note that the purchase price of the Kindred-Gentiva transaction is approx. $1.8 billion.  Based on Gentiva’s second quarter annualized revenue of about $2 billion this works out to around 90% of revenue.  We again ask the question, are the other stocks undervalued?

MULTIPLES OF EV/EBITDA. Think of this as price as a multiple of EBITDA.

10/1/2014 10/1/2013
Almost Family 16.57* 5.79
Amedisys 22.22** 7.98
Gentiva 11.75 6.43
LHC Group 8.55 7.04
HH Index Average 14.77 6.81
Addus 10.96 14.08

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 30.

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.

* The spike in EBITDA for Almost Family may be a result of their 4th quarter acquisition of $150M Suncrest.

** The spike in multiple of EBITDA for Amedisys may be a result of the increased earnings recently announced for the 2nd quarter. It seems that the stock trades on current earnings but the multiple of EBITDA is calculated on a trailing twelve months.

IN THE NEWS:

Gentiva-Kindred:  After months of waiting, and as we predicted, the news broke that the Kindred-Gentiva transaction is going forward.  A Definitive Agreement has been executed with final closing to take place in the first quarter of 2015.

On May 15 we woke up to the news that Kindred had put forth an unsolicited offer of $14.50 per share for Gentiva.  Gentiva adamantly said no.  But now, after months of zigging and zagging by both parties we have a deal at $19.50 per share.  On May 1st the stock at was at $7.50.  Some pretty good negotiating.

The purchase price is $1.8 billion.  They anticipate revenue of combined entities of approx. $7.1 billion with operating income of $1 billion.  Synergies of $70 million in cost savings are expected within two years.

According to their press release, this will make their combined company the largest provider of rehabilitation, home health and hospice services in the country.  They will operate within the “Kindred at Home” division and be based in Louisville, however they will keep a significant regional presence in Atlanta, where Gentiva is based.

Kindred has an excellent presentation on their web site, however, to make it easy, you can access it here:

Kindred-Gentiva Combination

We can’t help but speculate….as health care, insurance, and other companies move toward a continuum of care…..will this transaction presage the eventual sale of all of the public home care companies?  Will they go private?  Who will be left five years from now?

NAHC PANEL DISCUSSION – Find out what’s going on in M&A and home care:

On Tuesday, October 21 at 2:30 at NAHC’s annual conference we will be hosting a panel discussion on the latest trends in the M&A consolidation of home care.  Featured will be Todd Flowers, VP of Development, Kindred, Peter Sosnow, Integration leader, Humana at Home (formerly SeniorBridge), and Cory Mertz and Brian Bruenderman, partners here at Stoneridge.  Bring your questions and let the experts respond.   Link to more information:  NAHC Panel

GRAPHS: This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through September, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point. For the past decade, it’s been quite a ride)

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index
This second chart 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 November, 2002. It has been quite a ride.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

MERGER & ACQUISITION ACTIVITY:

SOLD….by Stoneridge Partners:

  • Dallas, TX: Reachout Home Care, Inc, a premier Medicare agency with offices in Dallas and Houston sold to a national healthcare company.   Congratulations to Joe and Peter Lynch for building such a fine company.  Joe and Peter will both be staying on in executive positions.  Stoneridge Partners provided sell-side advisory services.
  • Tyler, TX:  Omega Home Health, a diversified Medicare home health agency, sold to a regional home care and hospice company.  Cory Mertz, one of our partners, provided  sell-side advisory services.
  • Tampa, FL:  Ascentia Home Care, a Medicare agency with offices throughout the Tampa/Clearwater area merged into Carter Healthcare.  Stoneridge Partners provided sell-side advisory services.

Other Transactions From Around the Country

  • Kansas City, KS:   Swope Community Enterprises has exited home health care.  Just two years ago they bought Kansas City Home Care but now have sold to Thoughtful Care, Inc., based in Prairie Village, Kansas.
  • Lynbrook, NY:  Nautic Partners, a mid-market private equity group, announced that it has partnered with management to acquire All Metro Health Care Services.  Healthcare Finance Group led the financing.  David Middleton remains President and CEO.
  • Craven County, NC:  Craven County Home Health has approved the sale of their home health agency to PruittHealth for $850,000.  Revenue over the past four years totaled $2.14 million.  The primary asset is the Certificate of Need.

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Jacksonville, FL – $2 million revenue Medicare home care agency based in Jacksonville.  Well established with strong management team in place.  Diverse referral base.  Stoneridge file S-4159
  • New Jersey – $4 million hospice serving southern New Jersey, well-established with a great reputation for quality care.  Stoneridge file S-1070
  • Utah – $10 million home health and hospice provider with multiple office locations. Good platform or add-on opportunity, motivated seller.  Stoneridge file S-2262
  • New Mexico – $2.3 million Medicare provider serving the Roswell area. Clean surveys.  Stoneridge file S-5295
  • Arizona – $2 million hospice located in large Metropolitan area.  Clean surveys and no CAP issues.  Stoneridge file S-6210.
  •  Michigan – $2.2 million revenue behavioral health company providing Medicaid waiver services in group homes. Great relationship with referral sources.  Stoneridge file #S-1066.
  • llinois – Profitable $5.5 million revenue Medicare home care and hospice serving the northern Chicago MSA.  Mature management team in place, a diverse referral base and strong outcomes — exceeding state and national averages on 15 of 22 quality measures as measured by Medicare’s “home health compare”.  Stoneridge file S-5288.
  • Ohio– $2.2 million revenue run rate diversified agency in central Ohio.  Private pay and both Medicare & Medicaid certified to serve both dual eligible and managed care populations.  Excellent outcomes.  Stoneridge file S-5276.
  • West Texas – $3.5 million Medicare agency established in 1995.  Stoneridge file S-5279.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Florida – Orlando area Medicare agency with about $900,000 revenue.  Stoneridge file S-2540.  UNDER CONTRACT
  • Ohio – $11 million Ohio Medicaid Provider.  Experienced management team will stay with new owner.  Stoneridge file S-5283.  UNDER CONTRACT
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.  UNDER CONTRACT
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file S-4250.
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric services, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file S-5231.
  • Minnesota – Medicaid home care agency.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge file S-5268.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • California – $8.3 Million Private Duty and Medicare Provider.  Predominately a private duty provider, this agency also operates a small, but significant, Medicare operation, making it a unique opportunity.  Owner will consider selling the business lines separately.  Stoneridge file S-3098.
  • California – $5 million Hospice agency east of Los Angeles, profitable with clean surveys.  Stoneridge file S-3037
  • New Mexico – Private pay home care and care management agency with annual revenue approaching $1 million.  Stoneridge file S-5450
  • California – $3 million Santa Barbara Medicare agency, very motivated seller invites all offers.  Stoneridge file S-3098M

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.

Favorite Cartoon

12_10_04 Debate

 

 

 

 

 

 

 

 

 

 

 

 

 

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] –  800-218-3944

Previous editions of this monthly newsletter can be searched for below.    Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

September 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month

We go back to the perhaps prescient quote a few months ago from Paul Diaz, CEO of Kindred regarding their proposed purchase of Gentiva:

“We will not be deterred.  We are determined to pursue the proposed combination of Kindred and Gentiva and are committed over the long term to achieving our objective.”  

We continue to believe that this deal will go forward.  More on this later in this column.

The Stoneridge Partners Home Health Index (HH Index) continues on a tear, up another 8.8%.

With four straight months of increases,  our HH Index is now up over 46% since May 1st.   These increases started when Kindred made a bid to purchase Gentiva, causing Gentiva’s stock to soar 80% overnight.   But since then all stocks in our index are up substantially.

Since May 1:

Almost Family +30%

Amedisys + 53%

Gentiva  + 140%

LHC Group  +24%

HH Index + 46%

Not since July 1, 2011 has our HH Index been at this level.

The high for our HH Index was set in September, 2008 at 41.75.  We now sit at 23.18, but we’re crawling back.

Here are this month’s results:

Company 8/31/14 7/31/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 27.98 23.44 +19.37% -13.45% +48.28%
Amedisys 20.92 20.19 +3.62% +42.99% +28.42%
Gentiva 18.07 18.10 -0.17% +45.61% +57.54%
LHC Group 25.74 23.48 +9.63% +7.07% +13.74%
HH Index 23.18 21.30 8.80% +11.15% +38.86%
S&P 500 2003.37 1930.67 +3.77%  +8.39% +22.68%
Addus 21.90 22.25 -1.57% -2.45% +3.40%

All stocks in our index are up over one year ago with our HH Index up over 38%.

But more importantly, when checking back one year ago to the multiples of EBITDA and percentage of selling price to revenue we see big changes.

PERCENT OF REVENUE & MULTIPLE OF EBITDA:

Enterprise Value = EV

EV/REVENUE as a percentage. Think of this as selling price as a percentage of revenue.  What a difference a year makes!

9/1/2014 9/1/2013
Almost Family 72% 42%
Amedisys 70% 42%
Gentiva 92% 65%
LHC Group 77% 66%
HH Index Average 77.8% 53.8%
Addus 77% 80%

Note that, perhaps as a result of Kindred’s offer, the price of Gentiva’s stock is now at 92% of revenue, which begs the question: Are the other companies under valued?

MULTIPLES OF EV/EBITDA. Think of this as price as a multiple of EBITDA.

9/1/2014 9/1/2013
Almost Family 17.33 5.66
Amedisys 23.50* 7.82
Gentiva 12.10 6.37
LHC Group 9.54 6.83
HH Index Average 15.62 6.67
Addus 12.69 10.5

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.   EV has been calculated based on stock prices August 31.

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.

* This spike in multiple of EBITDA for Amedisys may be a result of the increased earnings recently announced for the 2nd quarter. It seems that the stock trades on current earnings but the multiple of EBITDA is calculated on a trailing twelve months.

IN THE NEWS:

Gentiva-Kindred: News regarding the potential Kindred – Gentiva transaction continues to provide interesting reading.  Since this was first made public we predicted that this transaction would go forward.  We continue to do so.

As you will recall, Gentiva has two offers on the table, both at $17.25, one from Kindred, and the other from an unknown suitor.  Last month we speculated on four possible candidates, and at the top of our list was Formation Capital, who now, according to Susquehanna analyst Chris Riggs, looks to be the other buyer.

Formation Capital through their platform Genesis however has agreed to merge with Skilled Healthcare (NYSE:SKH) in a stock swap.  According to Riggs it is unlikely that Formation Capital can pursue two major and complex deals at the same time.  “The Genesis deal creates a cleaner path for Kindred’s bid on Gentiva.”

SECOND QUARTER EARNINGS…..

Last month’s issue contained Amedisys’ numbers.  This month we have the remaining stocks in our HH Index, plus Addus. In thousands

TOTAL FOR HH INDEX, including Almost Family, Amedisys, Gentiva and LHC Group.

2014 2013 Difference % Change
Revenue 1,116,850 983,086 +133,764 +13.61%
Gross Profit 499,866 443,223 +56,643 +12.78%
% GP 44.75% 45.08% -0.33 -.74%
G&A Expenses* 425,347 389,061 +36,286 +9.33%
Operating Income 74,519 77,632 -3,113 -4.01%
HH Index 6/30 18.81 15.06 +3.75 +24.90%

ALMOST FAMILY (AFAM)

2014 2013 Difference % Change
Revenue
Visiting Nurse 99,438 66,000 +33,438 +50.66%
Personal Care 25,499 20,400 +5,099 +25.00%
Total Revenue 124,937 86,400 +38,537 +44.60%
Gross Profit 59,350 40,253 +19,097 +47.44%
% GP 47.50% 46.49% +0.91 +1.95%
G&A Expenses 52,342 35,809 +16,533 +46.17%
Operating Income 7,008 4,444 +2,564 +57.70%
Stock Price 6/30 22.08 19.09 +2.99 +15.6%

Revenue up 45%, gross profit up 47%, operating income up 58% and stock price only up 15.6%.

Note for comparison purposes:

In December, 2013 they acquired SunCrest HealthCare with reported revenue of $150 million. In their earnings report it was stated that this acquisition added a total of $35.1M per quarter to revenue ($30.8 to visiting nurse & $4.3 to personal care), which annualizes out to $140.4M.

In July, 2013 they acquired Indiana Home Care Network with reported revenue of $13.3 million. It was stated that this acquisition added $2.6M per quarter to revenue. which annualizes out to $10.4M.

Backing these revenue numbers out it would show that same store sales were up about $837,000 or 1%.

GENTIVA (GTIV)

2014 2013 Difference % Change
Revenue
Home Health 269,068 235,216 +33,852 +14.39%
Hospice 172,322 179,208 -6,886 -3.84%
Community Care 56,650 56,650
Total Revenue 498,040 414,424 +83,616 +20.18%
Gross Profit 230,690 195,477 +35,213 +18.01%
% GP 46.32% 47.17% -0.85% -1.80%
G&A Expenses* 189,103 161,937 +27,166 +16.78%
Operating Income 41,587 57,010 -15,423 -27.05%
*Excludes interest
25,322 22,790 +2,532 +11.11%
Stock Price 6/30 15.06 9.96 +5.10 +51.2%

For comparison purposes note that in October, 2013 Gentiva purchased Harden Healthcare with revenue of approx. $412 million, 40% of which came from hospice with the remaining revenue primarily from community care programs such as Medicaid waiver.To read the entire earnings transcript go to the following link: Gentiva Earnings Report

LHC Group (LHCG)

2014 2013 Difference % Change
Revenue
Home Health 154,260 132,638 +21,622 +16.30
Hospice 17,068 13,906 +3,162 +22.74
Facility Based Services 17,539 19,758 -2,219 -11.23
Total Revenue 188,867 166,302 +22,565 +13.57
Gross Profit 77,340 69,293 +8,047 +11.61
% GP 40.95 41.67 -0.72 -1.73
G&A Expenses* 63,977 57,365 +6,612 +11.53
Operating Income 13,363 11,928 +1,435 +12.03
Stock Price 6/30 21.37 19.58 +1.79 +9.14%

LHC Group, Insider Trading: We note that, perhaps as a result of increased share price, there has been considerable insider trading taking place. Beginning on August 20th, Coliseum Capital sold 158,011 shares of stock for a total of over $4 million.

That was followed by CEO Keith Myers, in three separate transactions, selling 170,000 shares for a total of $4,317,482. He continues so hold 239,821 shares at a current value of approx. $6.2 million.

ADDUS (ADUS)  (Not included in our HH Index)

2014 2013 Difference % Change
Revenue 76,965 65,755 +11,210 +17.05
Gross Profit 20,580 16,613 +3,967 +23.88
% GP 26.7 25.3 +1.4 +5.53
G&A Expenses* 16,482 12,633 +3,849 +30.47
Operating Income 4,098 3,980 +118 +2.96
Stock Price 6/30 22.48 19.74 +2.74 +13.8%

GRAPHS: This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through August, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point. For the past decade, it’s been quite a ride)

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index
This second chart 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 November, 2002. It has been quite a ride.

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 August, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

MERGER & ACQUISITION ACTIVITY:

From Stoneridge Partners:

  • Nashville, TN:  We recently completed the sale of Nashville based Willowbrook Home Health Systems to Five Points Healthcare.  Started in 1981 by June Baldini,  Willowbrook is a Medicare certified home health agency and hospice licensed in over 20 counties throughout central Tennessee.  Congratulations to June for building such a great company.  Stoneridge Partners provided sell-side advisory services to June.
  • Kissimmee, FL:  We recently completed the sale of Phoenix Home Care, a large Medicare agency with five offices covering 17 counties and four Florida districts.  Started in 2009, this is an amazing story of  growth in a professional manner.  Congratulations to the partners for building such a great company.  Cory Mertz, one of our partners, provided sell-side advisory services.

Other Transactions From Around the Country

  • St. Louis:  SSM Healthcare has agreed to purchase Adrian County Health Department’s home health an hospice division.  SSM Health at Home is part of the SSM Health Care System.
  • Overland Park, KS:  Kansas based Phoenix Home Care, Inc.announced that it has reached a definitive agreement to acquire Essential Health Care.   Phoenix Home Care as 13 offices and serves communities throughout Missouri, Kansas, and Colorado.
  • New York:  Reported by Reuters, private equity firm GTCR LLC has hired investment banks to find a buyer for Curo Health Services, a provider of home healthcare and hospice services, and hopes it will fetch as much as $750 million, according to people familiar with the matter.
  • Louisville:  Reuters reported that ResCare is being sold by its private equity owner Onex Corp, in a deal that could fetch more than $1 billion.

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Illinois – Profitable $5.5 million revenue Medicare home care and hospice serving the northern Chicago MSA.  Mature management team in place, a diverse referral base and strong outcomes — exceeding state and national averages on 15 of 22 quality measures as measured by Medicare’s “home health compare”.  Stoneridge file S-5288.
  • Arizona – $2 million hospice located in large Metropolitan area.  Clean surveys and no CAP issues.  Stoneridge file S-6210.Michigan.
  •  Michigan – $2.2 million revenue behavioral health company providing Medicaid waiver services in group homes. Great relationship with referral sources.  Stoneridge file #S-1066.
  • Ohio- $2.2 million revenue run rate diversified agency in central Ohio.  Private pay and both Medicare & Medicaid certified to serve both dual eligible and managed care populations.  Excellent outcomes.  Stoneridge file S-5276.
  • West Texas – $3.5 million Medicare agency established in 1995.  Stoneridge file S-5279.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Florida – Orlando area Medicare agency with about $900,000 revenue.  Stoneridge file S-2540.
  • Ohio – $11 million Ohio Medicaid Provider.  Experienced management team will stay with new owner.  Stoneridge file S-5283
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file S-4250.
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric services, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file S-5231.
  • Minnesota – Medicaid home care agency.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge file S-5268.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • Dallas-Ft. Worth – $1.7 million of pure high-end private pay.  No Medicare/Medicaid. Professionally run and profitable.  Stoneridge file S-5281.
  • California – $8.3 Million Private Duty and Medicare Provider.  Predominately a private duty provider, this agency also operates a small, but significant, Medicare operation, making it a unique opportunity.  Owner will consider selling the business lines separately.  Stoneridge file S-3098.
  • California – Los Angeles Medicare, Medi-Cal and private pay skilled care provider.  They have a long history in the local community and top-notch management that is willing to stay with a new owner.  Stoneridge file S-3000.
  • Ohio – Small Medicaid waiver business in the Columbus area, Medicare certified.  Stoneridge file S-2545.
  • California – $5 million Hospice agency east of Los Angeles, profitable with clean surveys.  Stoneridge file S-3037
  • New Mexico – Private pay home care and care management agency with annual revenue approaching $1 million.  Stoneridge file S-5450
  • California – $3 million Santa Barbara Medicare agency, very motivated seller invites all offers.  Stoneridge file S-3098M

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.

Favorite Cartoon

Airlinesizing

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] –  800-218-3944

Previous editions of this monthly newsletter can be searched for below.    Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

August 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month:

“We are pleased to see the overall positive tone of the proposed Medicare regulations recently published by CMS, in particular the recision of the physician face-to-face narrative requirement that has proven so troublesome…..these are some of the most positively written proposed regulations we have seen since the implementation of the home health prospective payment system in 2000.”     Steve Guenthner, President, Almost Family

The Stoneridge Partners Home Health Index (HH Index) hits a three year high, up another 13%.

While the S&P 500 suffered its first loss in four months, our Stoneridge Partners Home Health Index gained another 13% and is now up 34% since May 1.  Not since August, 2011 has our index been at this level.

Again the prices of the four public companies that make up our index present a very mixed picture.  This past month’s increase was powered primarily by Amedsys and Genitva, both up over 20%.  Gentiva is now up 140% since May 1, following Kindred’s offer.  More on this later.

The high for our HH Index was set in September, 2008 at 41.75.  We now sit at 21.30, but we’re crawling back.

Here are this month’s results:

Company 7/31/14 6/30/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 23.44 22.08 +6.16% -27.50% +22.53%
Amedisys 20.19 16.74 +20.61% +38.00% +61.39%
Gentiva 18.10 15.06 +20.19% +45.85% +68.53%
LHC Group 23.48 21.37 +9.87% -2.33% +2.35%
HH Index 21.30 18.81 +13.24% +2.16% +30.45%
S&P 500 1930.67 19.60.41 -1.52%  +4.45% +14.53%
Addus 22.25 22.48 -1.02% -0.89% +13.29%

On a very positive note all stocks in our index are up over one year ago with our HH Index up over 30%.

IN THE NEWS:

Gentiva-Kindred: News regarding the potential Kindred – Gentiva transaction continues to provide interesting reading.  In May Kindred offered to buy Gentiva shares for $14.  The stock at that time was trading for around $8, so this was huge news and the price of the stock skyrocketed.  Gentiva however rejected the offer, and it was rumored that Gentiva was considering an acquisition of Amedisys.

Kindred raised their offer to $14.50 which was immediately rejected, and Gentiva then put in place a poison pill that made an acquisition much more difficult.

This past month Gentiva disclosed that they had received another offer from an undisclosed party for $17.25 a share.  Kindred then matched the offer.

From what we have been able to read in the various press releases, it now appears that both the undisclosed suitor and Kindred are in due diligence. Interesting!

Rumored names of the undisclosed suitor include:

  • Formation Capital, a private equity firm with over $4 billion invested in senior living and an  investor in Millennium Home Health Care.  They are also an investor in hospice.
  • Cressey & Co, a private equity firm that with investments in Encompass Home Health & Hospice, and Hospice Compassus.
  • GTCR, a private equity firm whose $8 billion portfolio includes Curo Health Services, a hospice provider.
  • KKR, owner of 15% of Amedisys.

We continue to believe that Kindred will be the successful bidder, and that a deal will get done.

AMEDISYS released their 2nd quarter earnings, by the numbers, in thousands

2014 2013 Difference % Change
Revenue
   Home Health 243,500 250,500 (7,000) (2.79%)
   Hospice 61,500 65,400 (3,900) (5.96%)
     Total Revenue 305,006 315,960 (10,954) (3.47%)
Cost of Sales 172,520 177,760 (5,240) (2.95%)
Gross Profit
   Home Health 104,200 107,300 (3,100) (2.89%)
    % GP 42.8% 42.8%
   Hospice 28,300 30,900 (2,600) (8.41%
   % GP 46.0% 47.2%
     Total GP 132,486 138,200 (5,714) (2.95%
G&A Expenses 119,925 133,950 (14,025) (10.5%)
Operating Income 12,561 4,250 8,311 +195.5%

Revenue, and gross profit down in both home health and hospice, but expenses slashed and profit tripled.

This earnings release took place on July 30, and the stock price immediately spiked from $16 to $19.70.   Clearly the market liked these numbers.

To read the entire “Earnings Call Transcript” go to the following link:

Amedisys Earnings Call

GRAPHS: 

This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through July, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point.  For the past decade, it’s been quite a ride) [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index

This second chart 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 November, 2002.  It has been quite a ride. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 June, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

PERCENT OF REVENUE & MULTIPLE OF EBITDA: 

Enterprise Value = EV
Company EV as % of Revenue
Almost Family 67%
Amedisys 67%
Gentiva 98%
LHC Group 75%
Addus 81%

Note that, perhaps as a result of Kindred’s offer, the price of Gentiva’s stock is now at 98% of revenue, which begs the question:  Are the other companies under valued?

MULTIPLES OF EBITDA 

Company Multiple of EV/EBITDA
Almost Family 17.65
Amedisys 32.50*
Gentiva 13.76
LHC Group 9.36
Addus 12.69

* This spike in multiple of EBITDA for Amedisys may be a result of the increased earnings recently announced for the 2nd quarter.   It seems that  the stock trades on current earnings but the multiple of EBITDA is calculated on a trailing twelve months.

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.  EV has been calculated based on stock prices July 31.

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.

MERGER & ACQUISITION ACTIVITY:

Geisinger Community Health Services and SUN Home Health & Hospice announced today that they have received regulatory approval of the comprehensive integration agreement by which SUN Home Health & Hospice is now part of Geisinger Health System.

The agreement allows the organizations to work more closely together to benefit patients in need of home healthcare, hospice and other supportive medical services, administrators said.

“We are pleased to welcome SUN Home Health & Hospice to the Geisinger family,” said Geisinger Health System Vice President for Population Health Denise B. Prince.

The Ensign Group, Inc., the parent company of the Ensign™ Group of skilled nursing, rehabilitative care services, home health and hospice care, assisted living, and urgent care companies, announced today that it has acquired Namaste Hospice located in Denver, Colorado.    Link to the entire article:  Ensign Group Acquisition

Greystone Health Management Group acquired Amity Hospice, a Columbus, Ohio based provider.  This acquisition complements and expands their existing healthcare services in Ohio, which includes the Rehabilitation and Health Center of Gahanna and their existing home health services.

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Arizona – $2 million hospice located in large Metropolitan area.  Clean surveys and no CAP issues.  Stoneridge file S-6210.
  • Ohio- $2.2 million revenue run rate diversified agency in central Ohio.  Private pay and both Medicare & Medicaid certified to serve both dual eligible and managed care populations.  Excellent outcomes.  Stoneridge file S-5276.
  • West Texas – $3.5 million Medicare agency established in 1995.  Stoneridge file S-5279.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Illinois – Profitable $5.5 million revenue Medicare home care and hospice serving the northern Chicago MSA.  Mature management team in place, a diverse referral base and strong outcomes — exceeding state and national averages on 15 of 22 quality measures as measured by Medicare’s “home health compare”.  Stoneridge file S-5288.
  • Florida – Orlando area Medicare agency with about $900,000 revenue.  Stoneridge file S-2540.
  • Ohio – $11 million Ohio Medicaid Provider.  Experienced management team will stay with new owner.  Stoneridge file S-5283
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file S-4250.
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric services, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file S-5231.
  • Minnesota – Medicaid home care agency.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge file S-5268.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • Dallas-Ft. Worth – $1.7 million of pure high-end private pay.  No Medicare/Medicaid. Professionally run and profitable.  Stoneridge file S-5281.
  • California – $8.3 Million Private Duty and Medicare Provider.  Predominately a private duty provider, this agency also operates a small, but significant, Medicare operation, making it a unique opportunity.  Owner will consider selling the business lines separately.  Stoneridge file S-3098.
  • California – Los Angeles Medicare, Medi-Cal and private pay skilled care provider.  They have a long history in the local community and top-notch management that is willing to stay with a new owner.  Stoneridge file S-3000.
  • Ohio – Small Medicaid waiver business in the Columbus area, Medicare certified.  Stoneridge file S-2545.
  • California – $5 million Hospice agency east of Los Angeles, profitable with clean surveys.  Stoneridge file S-3037
  • New Mexico – Private pay home care and care management agency with annual revenue approaching $1 million.  Stoneridge file S-5450
  • California – $3 million Santa Barbara Medicare agency, very motivated seller invites all offers.  Stoneridge file S-3098M
    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.

From the New Yorker

legalese

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] –  800-218-3944

Previous editions of this monthly newsletter can be searched for below.

 

 

 

 

Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

July 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month:

“All Gentiva stock owners should send a “strong signal” to Gentiva’s board by tendering their shares in support of Kindred’s increased offer”   Spokesperson for Kindred Healthcare, Inc.

If a majority of Gentiva’s shares are tendered, Kindred said it expects to amend the offer to purchase 14.9 percent of Gentiva’s shares, a move that would make it the largest shareholder and avoid triggering the poison pill measure.

The Stoneridge Partners Home Health Index (HH Index) increases by 8.2%.

Last month we saw our Stoneridge Partners Home Health Index increase by 9% and this month we are up another 8.2%.  The increases in the stock market as a whole also continue with the S&P 500 hitting all time highs, and now up five straight months.

The stock prices of the four public companies that make up our index however present a very mixed story.  A good part of this increase appears to be due to Kindred’s continued pursuit of Gentiva.  At the end of April,  Gentiva’s stock sold for $7.53.  At the close of June it was priced at 15.06 for exactly a 100% increase.

During this past month there were rumors that Gentiva is looking at Amedisys as an acquisition target.  Kindred then sent a letter to Gentiva raising concerns about this potential transaction.

On June 27th Amedisys stock made a sizable jump after announcing their second quarter earnings.  Amedisys is now up close to 23% over the last two months.

During this same two month period both Almost Family and LHC Group were up a little less than 3%.

The high for our HH Index was set in September, 2008 at 41.75.  We now sit at 18.81, down 55%.

Here are this month’s results:

Company 6/30/14 5/31/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 22.08 20.54 +6.97% -31.70% +15.66%
Amedisys 16.74 14.55 +13.08% +14.42% +44.31%
Gentiva 15.06 13.63 +9.50% +21.35% +51.20%
LHC Group 21.37 20.37 +4.68% -11.11% +9.14%
HH Index 18.81 17.27 +8.19% -9.78% +24.94%
S&P 500 1960.41 19.23.57 +1.88%  +6.06% +22.05%
Addus 22.48 22.76 -1.25%  +0.13% +13.88%

On a very positive note all stocks in our index are up over one year ago with our HH Index up 25%.

IN THE NEWS:

Gentiva-Kindred: News regarding the potential Kindred – Gentiva transaction continues to dominate the home care news, and now, to make things more interesting, we have a rumor of a possible Gentiva – Amedisys transaction.  Link to article:  Kendrid – Gentiva – Amedisys

There appear to be good  synergies between Gentiva and Amedisys, and with private equity firm KK&R owning a substantial chunk of Amedisys, and also holding a seat on the board, perhaps this rumor should be taken seriously.

Will Kindred buy Gentiva or will Gentiva buy Amedisys?  Good question, but we can’t help but think that one of these possibilities will become a reality.

GRAPHS: 

This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through June, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point.  For the past decade, it’s been quite a ride) [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index

This second chart 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 November, 2002.  It has been quite a ride. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 June, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

PERCENT OF REVENUE & MULTIPLE OF EBITDA: 

Enterprise Value = EV
Company EV as % of Revenue
Almost Family 65%
Amedisys 51%
Gentiva 93%
LHC Group 69%
Addus 82%

MULTIPLES OF EBITDA 

Company Multiple of EV/EBITDA
Almost Family 16.96
Amedisys 19.72
Gentiva 12.93
LHC Group 8.60
Addus 12.80

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.  EV has been calculated based on stock prices June 1.

Enterprise value is calculated 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.

MERGER & ACQUISITION ACTIVITY:

Graham Holdings-Residential Healthcare:  In one of the more interesting transactions it was recently announced that Graham Holdings, the company created from the sale of the Washington Post, has acquired a majority interest in Troy, Mich. based Residential Healthcare Group, the parent company of Residential Home Health and Residential Hospice.  Residential will continue to be run by its current CEO and its management team will remain in place.

We note that this acquisition follows the Washington Post’s purchase in Oct, 2012 of a majority of stake in Celtic Healthcare, which provides home care services in Pennsylvania and Maryland.

Donald E. Graham, chairman and chief executive of Graham Holdings, said in a statement that the acquisition was part of his group’s “ongoing strategy of acquiring companies with demonstrated earnings potential and strong management teams attracted to our long-term investment horizon.”

To read the entire press release:   Graham Holdings – Residential

Black Stone: Health Services Connection Inc., a 20-year-old Toledo home health-care agency, has been acquired by Home Care by Black Stone.

“One of the main reasons we pursued this acquisition is because they serve predominantly dual-eligible PASSPORT patients both Medicare and Medicaid,” said Darren Horrigan, vice president. Health Services Connection, which has 30 employees, was founded by Kathy Crabtree in 1994.  It will become part of Nursing Resources by Black Stone.

C&M Health Services, purchased Health & Comfort Home Care Agency, a home care agency in North Brunswick, NJ that provides services throughout the state of New Jersey. The principals of the new company have years of experience in the home health care industry, including extensive familiarity with advanced technological solutions that help individuals age-in-place and provide continuity of care.

Addus Home Care (ADUS) announced their acquisition of CURA Partners, doing business as Aid & Assist at Home, which includes eight offices providing personal care services throughout Tennessee.  Annual revenues are projected at $12 to $13 million.

STONERIDGE PARTNERS TRANSACTIONS:

Greystone Health Network finalized their acquisition of Senior Solutions Home Health Care.  Cory Mertz, one of our  Stoneridge Partners, provided sell-side advisory services.

Greystone-Senior Solutions

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Arizona – $2 million hospice located in large Metropolitan area.  Clean surveys and no CAP issues.  Stoneridge file #S-6210.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Illinois – Profitable $5.5M revenue Medicare home care and hospice serving the northern Chicago MSA.  Mature management team in place, a diverse referral base and strong outcomes — exceeding state and national averages on 15 of 22 quality measures as measured by Medicare’s “home health compare”.  Stoneridge file S-5288.
  • Ohio – $11 million Ohio Medicaid Provider.  Experienced management team will stay with new owner.  Stoneridge file S-5283
  • Mountain west – $18 million multi location home care and hospice with over $2.7 million EBITDA.  Strong management team in place.  Stoneridge file #S-5245.
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file #S-4250.
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric services, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file #S-5231.
  • Minnesota – Medicaid home care agency.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge fileS-5268.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • Dallas-Ft. Worth – $1.7 million of pure high-end private pay.  No Medicare/Medicaid. Professionally run and profitable.  Stoneridge file S-5281.
  • California – $8.3 Million Private Duty and Medicare Provider. Predominately a private duty provider, this agency also operates a small, but significant, Medicare operation, making it a unique opportunity.  Owner will consider selling the business lines separately. Stoneridge file S-3098.
  • East Texas – $1.3 million Medicare agency, profitable and growing.  Stoneridge file #S-5264.
  • California – Los Angeles Medicare, Medi-Cal and private pay skilled care provider.They have a long history in the local community and top-notch management that is willing to stay with a new owner.  Stoneridge file #S-3000.

To see more home care agencies and hospices exclusively list 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.

From the New Yorker

Alarm

 

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] –  800-218-3944

Previous editions of this monthly newsletter can be searched for below.

 

 

 

 

Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

June 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month:

“Despite Gentiva’s actions, we will not be deterred. We are determined to pursue the proposed combination of Kindred and Gentiva and are committed over the long-term to achieving our objective.”  Paul Diaz, CEO, Kindred Healthcare

This in response to Gentiva’s adoption of a poison pill designed to stop Kindred’s hostile takeover.

The Stoneridge Partners Home Health Index (HH Index) increases by 9%.

The increases in the stock market as a whole continue with the S&P 500 now up four straight months, and, this month, our Stoneridge Partners Home Health Index (HH index) showed a nice increase, plus 9%….but that is terribly misleading.

Due to Kindred’s $14 offer, Gentiva’s stock increased by 80%.  If Gentiva were to be dropped from our index, we would have suffered our fifth straight monthly loss…..and even with this large increase in Gentiva’s stock our index is still down 17% YTD.   More on the Gentiva-Kindred battle (war) later in this column.

The high for our HH Index was set in September, 2008 at 41.75.  We now sit at 17.27, down 58%.

Here are this month’s results:

Company 5/31/14 4/30/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 20.54 21.47 -4.33% -36.47% +3.89%
Amedisys 14.55 13.63 +6.75% -0.55% +18.10%
Gentiva 13.63 7.53 +81.01% +9.83% +27.86%
LHC Group 20.37 20.78   -1.97% -15.27% -7.37%
HH Index 17.27 15.85 +8.96% -17.17% +6.72%
S&P 500 19.23.57 1883.95   +2.10%  +4.07% +17.96%
Addus 22.76 21.62 +5.27%  +1.38% +26.51%

So there you have it…quite a mixed bag, with Almost Family starting out the year at 32, and now down five straight months to 20.5….a 36.5% drop, and Gentiva, after an 80% jump in May is still up only 9.8% YTD.

Amedisys is flat for the year, while LHC Group is down 15%. Addus, after a great run, is up just a little over 1%.

As I said, a real mixed bag.

IN THE NEWS:

Gentiva-Kindred:  On May 15 we woke up to the following headline:

Kindred Healthcare Announces Proposal to Acquire Gentiva Health Services for $14.00 Per Share in Cash and Stock, Representing a 64% Premium, in $1.6 Billion Transaction

With that announcement the price of Gentiva’s stock leaped from 8 to 14.

It certainly came as a surprise that Kindred was making an offer, but what came as a real surprise was seeing a 64% premium.  It is estimated that the total value of the transaction, including assumption of debt is approximately $1.6 billion.  Gentiva’s revenue run rate is about $1.9 billion, so that works out to about 82% of revenue.

Prior to the press release, communication had taken place between the two companies, and, at that time, Kindred made their offer.  Gentiva declined.  On May 15 Kindred went public with their offer, in what has been termed as a hostile take-over attempt.  Again, Gentiva publicly declined.

To read the press release, the initial letter from Kindred and Gentiva’s response go to the following link:  Gentiva-Kindred May 15

On May 23rd Gentiva adopted a poison pill, which is designed to stop a hostile takeover by triggering the issue of new shares that dilute the holdings of investors who exceed a threshold.  To read the Gentiva press release: Gentiva Board Action Poison Pill

Clearly Gentiva’s board feels strongly that Kindred’s offer is not in the best interests of their shareholders.  They consider Kindred’s attempt as someone looking to “opportunistically appropriate their value”.

(Note: It seems that the term “opportunistic” can have a positive or negative connotation depending on which side of the table you are sitting on).

In response to the “poison pill”, Paul Diaz, CEO of Kindred Healthcare issued the following statement:

“Despite Gentiva’s actions, we will not be deterred.  We are determined to pursue the proposed combination of Kindred and Gentiva and are committed over the long-term to achieving our objective”.

Gentiva’s gross margin is considerably higher than Kindred’s (42% vs. 33.5%), and Kindred believes that, after eliminating overlapping costs, acquiring Gentiva would immediately be accretive, and in fact it refers to the earnings impact as being “significant”.

It seems that Kindred has now become the ineradicable whale ($5.2 B) just waiting, following, and taking a long-term approach to its goal of swallowing Gentiva whole.

Will Kindred be successful?  The market seems to think there is a strong possiblity.  Remember that overnight Gentiva stock went from 8 to 14.  One would think that if the transaction were dead the stock would retreat back to 8 or lower, but it hasn’t.  Gentiva’s stock now sits at $13.63.  It seems that the market is betting this transaction will go through.

Other Interesting Developments:  On May 2nd North Tide Capital increased their stake in Almost Family to over 10%, and then on May 9 they announced that they have increased their stake in Amedisys to over 10%.  North Tide Capital was founded by Conan Laughlin, and is a healthcare focused investment fund with $1.1 billion in assets.

It should be noted that North Tide has a record of being an activist investor, as they are now fighting for significant changes at publicly traded Healthways (HWAY).

It should also be noted that several months ago KKR Asset Management announced that they now hold a 14.9% stake in Amedisys.  Coincidentally, soon after their announcement William Borne, Amedisys’ founder resigned all positions, and KKR’s Nathaniel Zilkha was nominated to the board.

Clearly some large investment firms see opportunity in the home care space, which on the surface may appear to be positive for our industry.

But what do all of these developments really portend?  Whether good or bad, change is in the works.

 GRAPHS: 

This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through May, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point.  For the past decade, it’s been quite a ride) [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index

This second chart 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 November, 2002.  It has been quite a ride. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 May, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

PERCENT OF REVENUE & MULTIPLE OF EBITDA: 

For many years the selling price of good Medicare agencies was generalized at about 100% of revenue.  Clearly that is no longer the case.    Enterprise Value = EV
Company EV as % of Revenue
Almost Family 60%
Amedisys 43%
Gentiva 89%
LHC Group 67%
Addus 84%

MULTIPLES OF EBITDA 

Company Multiple of EV/EBITDA
Almost Family 15.84
Amedisys 16.65
Gentiva 12.48
LHC Group 8.29
Addus 13.07

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.  EV has been calculated based on stock prices June 1.

Enterprise value is calculated 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.

MERGER & ACQUISITION ACTIVITY:

A New Health Network:  Ascentia Health and CHE Trinity have formed a joint company for managed-care contracting in Michigan, uniting a network of 27 hospitals, more than 12 physician organizations and 5,000 physicians in the state.  The new company—Together Health Network—will become one of the largest and most closely aligned clinically integrated networks in the nation.

Camellia Home Health & Hospice, based in Hattiesburg, Miss has acquired Lawley Premier Hospice Care of Rainbow City.

Five Points Healthcare, based in Atlanta, GA has purchased BestCare HomeCare based in Wodbridge, VA with an office in Winchester, VA.  BestCare is a combination of Medicare, Medicaid waiver, and personal care.

Signature Hospice, Home Health and Home Care recently acquired XL Hospice, a company that provides services throughout Idaho and Nevada.

STONERIDGE PARTNERS TRANSACTIONS:

This past month we completed two transactions:

Lutheran Home Care & Hospice based in Chambersburg, PA purchased Sacred Heart Home Health & Hospice based in Allentown, PA.  Rhonda Gronberg, our Director of Development, provided advisory services.

Senior Solutions Home Health Care has executed a purchase agreement for a sale to a health care management company, closing pending regulatory approval.  Cory Mertz, a partner at Stoneridge Partners, is providing sell-side advisory services.

COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Florida East Coast – $4 million plus private care with geriatric care component.  Steady 37% gross profit consistently produces high owner’s income.  Top management in place ready for transition.  Stoneridge file S-3004.
  • Ohio – $2.5 million Medicare agency in Columbus area, 75% traditional Medicare, long history of quality care.  Stoneridge file S-5232.
  • Mountain west – $18 million multi location home care and hospice with over $2.7 million EBITDA.  Strong management team in place.  Stoneridge file #S-5245.
  • Georgia – Medicaid provider with over $6 million in revenue, 40% gross margin, and approx. $800K in EBITDA.  Stoneridge file S-5263.
  • Texas – Multi-location private duty home care agency, $3.4 million revenue with a consistent 40% gross profit produces 15% EBITDA.   A quality agency evidenced by their latest survey with zero deficiencies,  Stoneridge file #S-4250.
  • Florida – $4 million revenue Medicare home care agency serving five counties in central Florida.  Multiple locations with strong management team in place.  Stoneridge file S-5272. 
  • West Virginia – Medicare home care agency in CON state.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Texas – $3.5 million Medicare & Medicaid provider.  40% pediatric servies, Gross margin of 48% and adjusted EBITDA of $400,000.  Stoneridge file #S-5231.
  • Minnesota – Medicaid home care agency.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge fileS-5268.
  • Florida – Diversified Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  • Dallas-Ft. Worth – $1.7 million of pure high-end private pay.  No Medicare/Medicaid. Professionally run and profitable.  Stoneridge file S-5281.
  • Missouri – $10 million revenue, primarily Medicaid but has Medicare provider number.  Stoneridge file# 5257.
  • East Texas – $1.3 million Medicare agency, profitable and growing.  Stoneridge file #S-5264.

To see more home care agencies and hospices exclusively list 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.

From the New Yorker

PremiumHeaven

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected] – Hey Lou – Here’s my number 800-218-3944

Previous editions of this monthly newsletter can be searched for below.

 

 

 

 

Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

May 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month:

“He gave me the biggest thrill of my life”  

Art Sherman, 77 year old trainer of California Chrome, winner of the 140th running of the Kentucky Derby.  In a story made for Hollywood, the two working owners bred an $8,000 mare to a $2,500 stallion to produce this winner.  It was the 77 year old trainer’s first time in the Derby.

The Stoneridge Partners Home Health Index (HH Index) drops over 8%

While the stock market as a whole continues to hit record highs, our Stoneridge Partners Home Health Index (HH Index) just keeps sinking…..now down four straight months…..off over 8% in April and now down 24% year to date (YTD).

All stocks in our index were down for the month and all are down YTD.  No exceptions.

Our HH Index is now up only 2.3% from one year ago, while the S&P 500 is up 18%.

The high for our HH Index was set in September, 2008 at 41.75.

Here are the results:

Company 4/30/14 3/31/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 21.47 23.1 -7.06% -33.59% +8.76%
Amedisys 13.63 14.89 -8.46% -6.84% +35.76%
Gentiva 7.53 9.12 -17.43% -39.32% -28.22%
LHC Group 20.78 22.06   -5.80% -13.56% -4.33%
HH Index 15.85 17.29 -8.33% -23.98% +2.29%
S&P 500 1883.95 1872.34   +0.62%  +1.93% +17.93%
Addus 21.62 23.05 -6.20%  -3.70% +82.60%

As you can see, all stocks in our index were down for the month with Gentiva leading the charge, now off over 39% YTD.  Almost Family is right behind, down 33.6% YTD.

Its a real mixed bag however with Amedisys up 35% from one year ago, while Gentiva is down 28%.

Addus also took another hit, now down 25% since March 1.  More on Addus later in this column.   In October 2013 they set their all time high at over 32, and they now sit at 21.6….still up 82% from a year ago.  Because they have very little Medicare revenue, they are not included in our index.

 GRAPHS:  This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through April, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point.  For the past decade, it’s been quite a ride) [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index

This second chart compares the percentage change of the HH index to the percentage change in the S&P 500 index for over 11 years,  going back to November, 2002.  It has been quite a ride. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 April, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

IN THE NEWS:

ADDUS:  On May 1st Addus was the first out of the block with their earnings release.                                 

                                               For Three Months Ended March 31, (in thousands)

                                    2014       2013
Same Store Acquisitions Total   Change % Change
Revenue 66,516 5,167 71,683 62,998 +8,685 +12.1%
Gross Profit 1,7004 1,664 18,668 15,798 +2,879 +15.4%
25.6% 32.2% 26.0%   25.1% 0.9% +3.4%
Operating Expenses 13,803 1,095 14,898 12,056 +2,842 +19.1%
Operating Income 3,201 569 3,770 3,742 +28 +0.01%

Stock price:  April 30, 2013 = $11.84   April 30, 2014 = $21.62

From their earnings report:  “Net income from continuing operations before taxes increased despite lost service days / hours due to inclement weather in many of our markets.  Net income was also reduced by increased investment spending on information technology and a new care system, as well as higher costs related to the Company’s Sarbanes-Oxley Act Section 404 compliance program.

The Company ended the quarter with nearly $17 million in cash and $43 million available under its revolving line of credit, with $4.2 million of free cash flow generated from operations in the quarter, before considering working capital needs and investments in the new Support Center.”

To read the entire press release go to the following link:  Addus 1st Quarter 2014 Results

For the transcript of the earnings call:  Addus Transcript

Also from CEO Mark Heaney: “We will become a sales organization.  We will position ourselves to be a leading provider to Managed Care.  We will re-engineer our system of care delivery.  We will lower our costs, drive health outcomes and connect our direct care staff and our at risk consumers to the healthcare system. Essentially we will play an important role in the shift to population management.”

ALMOST FAMILY will be reporting their first quarter results on Tuesday, May 6th before the market opens.  It will be interesting to see the effect of their fourth quarter 2013 acquisition of $155 million Suncrest.

An interesting article was recently published in Seeking Alpha. “Almost Family Positioned to Roll Up Home Health”.    Read the full article now…

AMEDISYS will host a conference call to discuss results for the first quarter on Thursday, May 8, 2014 at 10:00 a.m. Eastern Time.  The Company will issue its quarterly earnings release prior to hosting the conference call.

To participate on the conference call, please call a few minutes before 10:00 a.m. ET to either (877) 512-9171 (Toll free) or (815) 573-0979, use conference ID #35785199.  A replay of the conference call will be available through June 8, 2014.  The replay dial in number is (855) 859-2056 (Toll free) or (404) 537-3406 (Toll) and use conference ID #35785199.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: Amedisys for Investors

On April 23rd Amedisys announced that they finalized a settlement agreement with the government on their previously announced DOJ investigation and Stark Law self-referral.  Under the terms of the civil settlement, and as disclosed previously, Amedisys will pay a total of $150 million plus interest in two installments. The first installment of $115 million plus interest must be paid by May 2, 2014, and the remaining $35 million plus interest must be paid by October 23, 2014. The company will fund the settlement through cash on hand and draws upon its existing credit facility.  Read the full article here…

LHC GROUP plans to issue its earnings release for the first quarter after the market closes on Wednesday, May 7, 2014, and will host a conference call on Thursday, May 8, 2014, at 11:00 a.m. Eastern time.  The toll-free number to call for this interactive teleconference is (866) 393-1608 (international callers should call (973) 890-8327). A telephonic replay of the conference call will be available through midnight on Thursday, May 15, 2014, by dialing (855) 8592056 (international callers should call (404) 537-3406) and entering confirmation number 25729418.

GENITVA announced that it has scheduled a conference call and webcast on Wednesday, May 7, 2014, at 10:00 a.m. ET to discuss operating results for their first quarter.  Gentiva plans to issue its financial news release the morning of May 7, 2014 before pre-market trading.

Participants in the United States, Canada and international locations may call (973) 935-2408 and reference call # 31122421.   A replay of the call will be available on May 7, beginning at approximately 1:00 p.m. ET, and will remain available continuously through May 14.

To listen to a replay of the call from the United States, Canada or international locations dial (800) 585-8367 or (404) 537-3406 and enter the following PIN at the prompt: 31122421.

EARNINGS: We will be running a complete review of the fist quarter earnings reports in next month’s column.

SELLING PRICE AS A PERCENT OF REVENUE:  For many years the selling price of good Medicare agencies was generalized at about 100% of revenue.  Clearly that is no longer the case.   Selling Price = Enterprise Value = EV
Company EV as % of Revenue
Almost Family 69%
Amedisys 39%
Gentiva 79%
LHC Group 58%
Addus 84%

MULTIPLES OF EBITDA 

Company Multiple of EV/EBITDA
Almost Family 14.171
Amedisys 10.63
Gentiva 10.47
LHC Group 6.68
Addus 12.6

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.  EV has been calculated based on stock prices May 1.  EBITDA is calculated using methodology that may differ from that used by a company it is reporting.

MERGER & ACQUISITION ACTIVITY:

We enjoyed the above quote from Keith Myers, CEO of LHC Group:

We’ve worked hard….to prepare for what we believe will be an unprecedented period of consolidation in the home health industry.”

And this from Bill Dombi….

“As a result of cuts in Medicare reimbursement, 70% of home health providers will be underwater.”  Bill Dombi, Vice President of Legal 

Elmhurst Memorial Home Health and Elmhurst Memorial Hospice have become part of Residential Home Health, ranked among the leading home healthcare providers in the U.S. Current patients may continue care through Residential Home Health, which will operate Elmhurst Memorial Home Health and Elmhurst Memorial Hospice with the same staff and same services.

The Ensign Group, Inc. (Nasdaq:ENSG), the parent company of the Ensign™ Group of skilled nursing, rehabilitative care services, home health and hospice care, assisted living, and urgent care companies, announced that it has acquired Life’s Doors Hospice, Life’s Doors Home Health, and Life’s Doors Home Care Solutions located in Boise, Idaho.

Wellspring Capital Partners has agreed to acquire Great Lakes Caring, a provider of hospice and home health services in Michigan, Indiana and Ohio.  The seller would be fellow private equity firm Pouschine Cook Capital Management, which first acquired Great Lakes Caring back in 2007.  Great Lakes Caring was founded in 2004 by husband-and-wife team William Deary (CEO) and Cheri Lyn Deary (COO).

NEW COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Florida East Coast – $8 million diversified home care agency, 80% from high end private duty and 15% from traditional Medicare, accredited.  Stoneridge file S-5274
  • Diversified, Medicare certified and accredited covering 28 Ohio counties.  $2.3 million in revenue, 54% Medicare, 23% Medicaid, 23% private pay.  Stoneridge file S-5258.
  • Florida – $4 million revenue Medicare home care agency serving five counties in central Florida.  Multiple locations with strong management team in place.  Stoneridge file S-5272. 
  • Medicare home care agency in CON state West Virginia.  $3 million in revenue, growing with new CON territories being developed.  Strong management team.  Stoneridge file S-5261.
  • Medicaid home care agency in Minnesota.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Stoneridge fileS-5268.
  • Medicare certified and accredited home care agency, located in Maricopa County, Arizona.  Medicare census over 100.  Stoneridge file S-5262.
  • Diversified Florida Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records.  Stoneridge file S-5280.
  •  Medicaid home care agency located in Southeast USA with over $4 million in revenue and approx. $800K in EBITDA.  This is a division of a $10 million  agency, and the owner would consider selling the entire company. Stoneridge file S-5263.
  • Medicare certified & accredited west coast Florida home care agency with $5 million in revenue.  Professional management in place, and excellent financial records.  Stoneridge Partners S-5278.
  • Dallas-Ft. Worth – $1.7 million of pure high-end private pay.  No Medicare/Medicaid. Professionally run and profitable.  Stoneridge file S-5281.

To see more home care agencies and hospices exclusively list 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.

 

 

11_04_20 bean counters

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected]

Previous editions of this monthly newsletter can be searched for below.

 

 

 

 

Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

April 1st Update 2

This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly.

Quote of the Month:

Given that we have just finished up Masters’ weekend (congratulations Bubba), I thought it would be a good time to go back to the 1968 tournament with, what I believe is one of the classiest quotes in all of golf.  After Roberto DeVicenzo came in with the winning low score, it was discovered that he had signed an incorrect scorecard that had been prepared by his playing competitor, Tommy Aaron, and therefore he lost the tournament.

“I had to admit the mistake as is correct and proper for a sportsman, gentlemanly, but with great affliction. It’s my entire fault, how stupid I am.  However had I complained or condemned Tommy Aaron, I would have lost my prestige.”  Roberto DeVicenzo

And how did he, an Argentinian with English as his second language, in a pressure filled moment, come up with the phrase “with great affliction”?

Now at age 90 he says it is the best mistake he ever made.  “Money is easy to make, it is difficult to make a good name.”

Something to think about this spring, perhaps a time of renewal.

The Stoneridge Partners Home Health Index (HH Index) drops over 12%

After ending 2013 at a 2 1/2 year high, our HH Index dropped over 4% in January,  then dropped 1.2% in February, and now drops 12% in March.  We are now off over 17% for the year, while the S&P 500 is up a little over 1%.  What is going on…..see earnings reports for the year 2013 below.

Our Stoneridge Partners Home Health Index (HH Index) now sits at 17.07.  The high for our HH Index was set in September, 2008 at 41.75.

On a continued positive note…..our HH Index is still up year over year….up 8.3% from one year ago, however the S&P 500 is up over 19%.

Here are the results:

Company 3/31/14 2/28/14 Mos % Change YTD % Change Year Ago % Change
Almost Family 23.1 27.42 -15.75% -28.55% +13.07%
Amedisys 14.89 16.96 -12.21%  +1.78% +33.9%
Gentiva 9.12 10.71 -14.85% -26.51% -15.71%
LHC Group 22.06 23.56   -6.37%  -8.24%   +2.6%
HH Index 17.29 19.66 -12.05% -17.07%   +8.3%
S&P 500 1872.34 1859.45   +0.69%   +1.3% +19.32%
Addus 23.05 28.76 -19.85%   +2.67% +74.75%

As you can see, all stocks in our index were down for the month with Almost Family leading the charge, now off over 28% for the year.  After their Suncrest acquisition their stock shot up like a rocket from 19 to over 33 in just two months.  It now sits at 23, yet still up over 13% from one year ago.

Only Amedisys is up for the year.

Addus took the biggest hit, off close to 20% for the month.  In October 2013 they set their all time high at over 32, and they now sit at 23…..still up 74% from a year ago.  Because they have very little Medicare revenue, they are not included in our index.

 GRAPHS:  This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through March, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point.  For the past decade, it’s been quite a ride) [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index

This second chart compares the percentage change of the HH index to the percentage change in the S&P 500 index for over 11 years,  going back to November, 2002.  It has been quite a ride. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 March, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

EARNINGS:

Almost Family:   Year over year their revenue gained about 4.5% to $357.8 million up about $15 million, with traditional Medicare admissions up 4.4%.  $10.6 million of that revenue increase came from their two significant acquisitions.

Organic growth in their Visiting Nurse segment (93% Medicare) declined by 1% with organic Medicare admissions down about 5.9% primarily in Florida where there was overlap with SunCrest.

EBITDA for year 2013 was $18.9 million compared to $32.2 million for 2012, down 41.5%, yet their stock price is up 13% over one year ago.

Amedisys:  Amedisys’ CEO William Borne stepped down in February and they are now looking for a new CEO.  As was noted by Rahm Emanuel, Mayor of Chicago….“Never let a good crises go to waste” .  Point being, with change there is often great opportunity.  Perhaps this is a time of great opportunity for Amedisys.

KK&R makes an impact:  On March 27 it was announced that Nathaniel Zikha, a member of KK&R, was appointed to Amedisys’ Board of Directors.

Total revenue for the year 2013 was $1.25 billion down 13.3% from one year ago and, perhaps more interesting, down 12.5% from their 2009 revenue.

They were down in revenue in both home health and hospice:  home health revenue was down 14.3% and hospice revenue was down 9.4%.  Total gross profit percent fell from 43.7% to 42.5%, unfortunately this is very typical for our industry.

They recently announced that they will be closing 29 care centers (23 home health and six hospice) and consolidating another 25 care centers (21 home health and four hospice) with care centers servicing the same markets.

The market must be looking at these past and upcoming events in a positive manner….their stock is up 34% over one year ago.

Gentiva:  In October 2013, Genitva completed its acquisition of Harden Healthcare with revenues of approx. $476 million, therefore fourth quarter numbers were impacted.

Including the Harden acquisition, for year 2013 total revenue was up 1.2%, with home health up 7%, and hospice down 6%.

“The Hospice industry continues to be hammered by regulatory pressures and negative publicity, making growth in this segment extremely difficult.  In particular, the elimination of the adult failure to thrive and general debility admission quotes has created uncertainty and clearly impacted the physician referral patterns compared to recent years.”  Tony Strange, Gentiva CEO

As a result of the impact of home health Medicare reimbursement rate reduction, sequestration, and lower hospice volumes, total gross profit dropped from 46.9% to 45.4%, and adjusted EBITDA dropped from 180.5 million in 2012 to $149.5 million in 2013, off 17%.

The price of their stock is off 26% year to date and is down 15.7% from one year ago….the only stock in our index that is down year over year.

LHC Group: In a recently announced transaction, LHC Group finalized their acquisition of Deaconess HomeCare, which added 32 agencies in four states, with annual revenues of approx. $72 million.

Year over year revenues were up 3.2% to $658.2 million.  New home health admissions grew by 11.7%, while organic home health admissions grew by 3.6%.

Their stock is down 8% year to date and up 2.6% from one yer ago.

What we found most interesting (since we are an M&A firm) was CEO Keith Myers’ comments on the current M&A environment.

“The number of quality acquisition opportunities coming to market continues to increase as the negative impact of the Affordable Care Act is being realized by home health agencies across the country.  Since CMS released its final rule on rebasing on November 22, we’ve seen an even more significant spike in pipeline activity.  With certainty that the home health industry will be hit with an additional 7% cut, assuming an annual market basket adjustment of 2%, more and more home health providers are evaluating alternatives.

We believe that clarity on reimbursement over the next 4 years will serve to bring buyer and seller expectations in line and significantly accelerate consolidation in the industry.  An example is our recent announcement to purchase Deaconess HomeCare and Elk Valley Health Services, with combined annual revenues of approximately $72.6 million.  When you see a nationally recognized provider, with a longstanding reputation for providing quality care, seeking to be acquired, then you get a sense of the reimbursement headwinds causing many providers to look for alternatives.  We’ve worked hard….to prepare for what we believe will be an unprecedented period of consolidation in the home health industry.”

Addus:  As noted above, because Addus has very little Medicare revenue they are not included in our index.

Revenue for year 2013 was $265.9 million up 8.8%.  Gross profit percent  dropped from 26.2% to 25.5%, down 2.7%, so gross profit dollars was only up 5.7%

G&A was up, therefore, year over year, net operating income was down slightly.

But here is the interesting part……the price of their stock is up 75% over same time last year.  Clearly someone knows something.

From CEO Mark Heaney: “We will become a sales organization.  We will position ourselves to be a leading provider to Managed Care.  We will re-engineer our system of care delivery.  We will lower our costs, drive health outcomes and connect our direct care staff and our at risk consumers to the healthcare system. Essentially we will play an important role in the shift to population management.”

“Population Management”…..a phrase to remember.

SELLING PRICE AS A PERCENT OF REVENUE:  For many years the selling price of good Medicare agencies was generalized at about 100% of revenue.  Clearly that is no longer the case.   Selling Price = Enterprise Value = EV
Company EV as % of Revenue
Almost Family 74%
Amedisys 42%
Gentiva 82%
LHC Group 61%
Addus 92%

MULTIPLES OF EBITDA 

Company Multiple of EV/EBITDA
Almost Family 15.1
Amedisys 11.32
Gentiva 10.85
LHC Group 7.04
Addus 13.93

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.  EV has been calculated based on stock prices April 1.  EBITDA is calculated using methodology that may differ from that used by a company it is reporting.

MERGER & ACQUISITION ACTIVITY:

We enjoyed the above quote from Keith Myers, CEO of LHC Group:

We’ve worked hard….to prepare for what we believe will be an unprecedented period of consolidation in the home health industry.”

At the end of 2012 there were approx. 14,000 Medicare certified agencies, with about 1/2 of those with revenue under $1 million.  We can’t help wonder what this landscape will look like in the not so distant future.

“As a result of cuts in Medicare reimbursement, 70% of home health providers will be underwater.”  Bill Dombi, Vice President of Legal Affairs, NAHC

Almost Family: In a rather small transaction Almost Family announced that they have entered into an agreement to purchase the assets of the Medicare certified home health agency owned by Caldwell Medical Center in Princeton, Kentucky, with revenue of approx. $1.3 million.

LHC Group

1. Acquired two home health providers and has entered into a definitive asset purchase agreement to acquire one hospice provider. The transactions include a home health and community-based service provider in Tompkinsville, Ky., with a service area covering three counties in the certificate of need (CON) state of Kentucky; a home health provider in Valley, Ala., with a service area covering three counties in the CON state of Alabama and a hospice provider located in New Orleans, La.  Combined annual revenue for these providers is approximately $1.5 million.

2.   Acquired St. Joseph Hospital Home Health and Hospice located in Buckhannon, West Virginia, effective April 1, 2014.  The service area includes seven counties for home health and six counties for hospice.  The Home Health services division is now known as “West Virginia Home Health” and Hospice continues to be known as “St. Joseph’s Hospice.”

3.  Signed a definitive purchase agreement to acquire the assets of Professional Nursing Services, which is expected to close on May 1, 2014.  The acquisition comprises a home health provider and four community-based service providers located near Raleigh, North Carolina.  The service area includes nine counties for home health and four counties for community-based services.

Hospice Advantage:  Hospice Advantage announced the merger of its Birmingham location with Alabama’s Life Care Hospice of Gardendale.

The VNA of Western New York is expanding into Pennsylvania through a partnership with the Upper Allegheny Health System. In early April, the new VNA of Northwest PA is expected to begin operation as a joint entity of VNA and Bradford Regional Medical Center, which operates under the Upper Allegheny umbrella along with Olean General Hospital.

Porchlight VNA/Homecare, in western Massachusetts. Effective April 1, Chicopee VNA and its home care affiliate, Great to be Home Care will be incorporated into Porchlight VNA/Homecare, based in and originally known as Lee VNA.

Lower Cape Fear Hospice & LifeCareCenter is expanding its reach through a merger, the organization announced last week. Effective April 1, Mercy Care, a nonprofit hospice in Myrtle Beach.

Celtic Healthcare announced their acquisition of VNA-TIP Healthcare, with more than 30 home care and hospice branches in over 50 counties in Missouri and Illinois.

Signature HealthCARE announced that they have signed an agreement to acquire the assets of ConfiCare Home Health Solutions.  Conficare has offices throughout Florida, including Ormand Beach.  Conficare has been renamed Signature HomeNow.

ViaQuest, Inc. a leading regional health services provider, announced today that it has acquired the Indiana operations of TriStar Home Health and Hospice, a division of Trilogy Health Services, LLC. of Louisville, Ky. Terms were not disclosed.

The acquisition, effective immediately, includes TriStar operations known as Vibrant Home Health Care, serving 22 Indiana counties from locations in Evansville, Huntingburg and Terre Haute; Care One Homecare Services, serving 11 central Indiana counties from its Muncie office; and Serenity Hospice, serving 25 counties from branches in Lafayette, Fowler and Terre Haute.
 
Stoneridge Partners:  We recently announced the sale of Embrace Hospice of New Castle, Indiana.  Cory Mertz, one of our partners, provided sell-side advisory services.

NEW COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Home Care & Hospice – Medicare certified & accredited, located in a southern CON state with large urban population.  Over $9 million in revenue. Now on Contract.
  • Diversified, Medicare certified and accredited covering 28 Ohio counties.  $2.3 million in revenue, 54% Medicare, 23% Medicaid, 23% private pay.  Call Rhonda Gronberg and refer to file #S-5258.
  • Medicare certified and accredited home care agency with CONs covering nine Georgia counties.  Current run rate approximately $4 million.  Now on Contract.
  • Medicare and Florida Nurse Registry with over $4 million in revenue, in very dense population area with great room for growth. Established over ten years.  Call Don Cummins and refer to file #S-5247.
  • Medicare home care agency in CON state West Virginia.  $3 million in revenue, growing with new CON territories being developed.  Strong management team, call Cory Mertz and refer to file # S-5261.
  • Medicaid home care agency in Minnesota.  Large and diversified with $11 million in revenue, with unique license that positions it well for growth.  Call Brian Bruenderman and refer to file #S-5268.
  • Medicare certified and accredited home care agency, located in Maricopa County, Arizona.  Medicare census over 100.  Call Rhonda Gronberg and refer to file #S-5262.
  • Diversified Florida Medicare/Medicaid Home Care Agency with revenue of approx. $4 million.  Professionally operated with excellent financial records. Call Brian Bruenderman and refer to file # S-5280.
  •  Medicaid home care agency located in Southeast USA with over $4 million in revenue and approx. $800K in EBITDA.  This is a division of a $10 million  agency, and the owner would consider selling the entire company to the right buyer. Call Brian Bruenderman and refer to file #S-5263.
  • Medicare certified Florida home care agency with $4 million in revenue serving five counties.  Profitable with strong growth.  Call Cory Mertz and refer to File # S-5272.

To see more home care agencies and hospices exclusively list for sale by Stoneridge Partners go to our home page then click tab “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.

Eatenbyacamel

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected]

Previous editions of this monthly newsletter can be searched for below.

 

 

 

 

Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More

March 1st Update

[pl_alertbox type=”info”] This Home Health Index (HH Index) measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly. [/pl_alertbox]

Quote of the Month:

“I have been watching what is going on in Washington and their attitude toward home care and it is not a pretty picture.”  Val Halamandaris, President, National Association for Home Care & Hospice

Hot off the Press: President Obama’s 2015 budget once again calls for the introduction of a home health copay – as well as further cuts to post-acute care providers, including home health care.      Obama Budget

The Stoneridge Partners Home Health Index (HH Index) drops 1.2%

After ending 2013 at a 2 1/2 year high, our HH Index dropped over 4% in January,  and then dropped another 1.2% in February.  We are now off 5.7% for the year, while the S&P 500 is up just slightly for the year.

Our Stoneridge Partners Home Health Index (HH Index) now sits at 19.66.  The high for our HH Index was set in September, 2008 at 41.75.

On a continued positive note…..our HH Index is up 25.26% from one year ago, beating the S&P 500, up 22.76%.

Here are the results:

Company

2/28/14

% Month

2/28/13

% Year Ago

Almost Family 27.42 -9.83% 20.59 33.17%
Amedisys 16.96 12.39% 11.36 49.30%
Gentiva 10.71 -5.72% 10.52 1.81%
LHC Group 23.56 2.70% 20.32 15.94%
Home Health Index 19.66 -1.44% 15.70 25.26%
S&P 500 1859.45 4.31% 1514.68 22.76%
Addus 28.76 21.66% 8.81 226.45%

As you can see, these results are a mixed bag.  Almost Family, after a three month tear following their SunCrest acquisition, is now down 15.2% for the year, while Amedisys, following the exit of their CEO, William Borne, was up over 12% for the month, and is now up close to 16% for the year.    Gentiva was down for the month and LHC Group was up.  As I said, a mixed bag

The company that continues to surprise us is Addus, up another 21.7% for the month.  In October 2013 they set their all time high at over 32 and it looks like they now are headed right back.  Considering that a year ago the stock was at a little over 8 this is truly remarkable.

Because Addus has very little Medicare revenue, they are not included in our index.

 GRAPHS:  This first graph shows the HH Index compared to the actual prices of the individual companies that make up the chart through February, 2014.

(Note that by hovering your pointer over a spot, you will get the price at that point.  For the past decade, it’s been quite a ride) [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi.html” width=”604″ height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index vs. S&P 500 Index

This second chart compares the percentage change of the HH index to the percentage change in the S&P 500 index for over 11 years,  going back to November, 2002.  It has been quite a ride. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-vs-sp.html” height=”450″ scrolling=”no”]

Stoneridge Partners Home Health Index 12 Months Trailing

This third graph 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 February, 2014. [iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-12.html” height=”450″ scrolling=”no”]

[iframe_loader src=”http://stoneridgepartners.com/hhi/hhi-addus.html” width=”604″ height=”450″ scrolling=”no”]

AMEDISYS:  This past month it was announced that William (Bill) F Borne, CEO and Chairman stepped down and was named Chairman Emeritus.

Mr. Bourne founded Amedisys in 1982 and grew it into over a billion dollar company.  A true example of the American spirit.  We have had the pleasure of meeting with Bill on several occasions and have always enjoyed his enthusiasm, humor and insight.  We applaud Bill and wish him the best.

Also at Amedisys we recently caught up with Maxine Hochhauser, former CEO of AllianceCare.   She is now the Senior VP of Business Operations.

LHC GROUP recently announced their purchase of Deaconess HomeCare and Elk Valley Health Services with annual revenues of approximately $72.6 million. The purchase price was approximately $60 million.  This transaction will add 33 locations across 27 states

Their combined service area includes 121 counties for home health, 30 counties for hospice and 95 counties for community-based services in the states of Mississippi, Tennessee, Kentucky, Illinois, and Nebraska.

GENTIVA:  Last September Gentiva announced their acquisition of Harden Healthcare, with revenue of about $475 million, consisting of 49% home health, 41% hospice and 10% community care.

On September 1, 2013, just prior to that announcement, Gentiva stock was selling for $11.47.  It closed out February at $10.71, down 6.6%.

ALMOST FAMILY:  On November 5, 2013 Almost Family announced their acquisition of SunCrest Healthcare with approximate revenue of $150 million.  The purchase price was approximately $75.5 million.

On November 1st, just prior to the acquisition Almost Family stock was selling for $19.23.  It quickly rose to over $33 but has since settled back, closing out February at 27.42, down 17% from that high.

MERGER & ACQUISITION ACTIVITY:

On the Horizon: We were recently interviewed by Amy Or of the Wall Street Journal regarding merger & acquisition activity in home care and hospice.  Private equity groups typically have a holding period of five to seven years for their platform companies.  She gave examples of a couple of pretty good size platform companies that are on the market (how did she get this confidential information?).

At any rate it will be no surprise to hear announcements of some sizable transactions.  It would seem that the large strategic home care companies are the  natural buyers.  Stay tuned.

LHC GROUP announced that in addition to the large Deaconess transaction, they have also acquired two home health providers and has entered into a definitive asset purchase agreement to acquire one hospice provider.

The transactions include a home health and community-based service provider in Tompkinsville, Ky., a home health provider in Valley, Ala., And a hospice provider located in New Orleans, La.  Combined annual revenue for these providers is approximately $1.5 million.

HOSPICE ADVANTAGE:  Rod Hildebrant, President, announced the merger of its Birmingham, Alabama location with Life Care Hospice of Gardendale

STONERIDGE PARTNERS:  We had three announced sales this past month

  • SuCasa Healthcare Services of New Mexico sold to a national health care provider.
  • The Domestic Agency, a San Antonio home care agency sold to a national healthcare provider
  • Good Health Services, a North Carolina agency sold to a national healthcare provider.

In all three transactions Stoneridge Partners provided sell-side advisory services.

SELLING PRICE AS A PERCENT OF REVENUE:  For many years the selling price of good Medicare agencies was generalized at about 100% of revenue.  Clearly that is no longer the case.   Selling Price = Enterprise Value = EV
But take a good look at Addus….amazing!
Company EV as % of Revenue
Almost Family 65%
Amedisys 35%
Gentiva 67%
LHC Group 69%
Addus 108%

MULTIPLES OF EBITDA 

Company Multiple of EV/EBITDA
Almost Family 10.06
Amedisys 6.68
Gentiva 6.99
LHC Group 7.32
Addus 14.40

The above calculations are based on Enterprise Value (EV), with data provided by Capital IQ.  EV has been calculated based on stock prices January 31.  EBITDA is calculated using methodology that may differ from that used by a company it is reporting.

NEW COMPANIES EXCLUSIVELY LISTED FOR SALE BY STONERIDGE:

  • Home Care & Hospice – Medicare certified & accredited, located in a southern CON state with large urban population.  Over $9 million in revenue.  Call Rhonda Gronberg and refer to file # S-5265.
  • Diversified, Medicare certified and accredited covering 28 Ohio counties.  $2.3 million in revenue, 54% Medicare, 23% Medicaid, 23% private pay.  Call Rhonda Gronberg and refer to file #S-5258.
  • Medicare certified and accredited home care agency with CONs covering nine Georgia counties.  Current run rate approximately $4 million.  Call Brian Bruenderman and refer to file # S-5270.
  • Medicare home care agency in CON state West Virginia.  $3 million in revenue, growing with new CON territories being developed.  Strong management team, call Cory Mertz and refer to file # S-5261.
  • Medicaid Home Care Agency in Midwest with over $10 million in revenue. Call Kevin Taggart and refer to file # S-5257
  • Hospice for sale in Central Indiana.  $3.2 million in revenue servicing 26 counties.  Professional management team in place.  Call Cory Mertz and refer to file # S-5277
  •  Medicaid home care agency located in Southeast USA with over $4 million in revenue and approx. $800K in EBITDA.  This is a division of a $10 million  agency, and the owner would consider selling the entire company to the right buyer. Call Kevin Taggart and refer to file #S-5263
  • Medicare certified Florida home care agency with $4 million in revenue serving five counties.  Profitable with strong growth.  Call Cory Mertz and refer to File # S-5272.

To see more home care agencies and hospices exclusively list for sale by Stoneridge Partners go to our home page then click tab “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.

From the Wall Street Journal….notice the executives are all pictured as old, fat and bald…..what’s with that?

14_03 financing

MORE:  And for additional musings on the state of homecare and what’s going on at Stoneridge Partners, visit our blog, which is updated regularly: stoneridgepartners.com/blog 

From Don Cummins, Publisher of “The Home Health Index”  [email protected]

Previous editions of this monthly newsletter can be searched for below.

 

 

 

 

Links to Google Finance: Almost Family | Amedisys | Gentiva | LHC Group

Facebooktwitter
Read More
Call Now Button(814) 723-9000