Stoneridge Partners | Webinar: Home Health & Hospice Buying, Selling

Stoneridge Partners | Webinar: Home Health & Hospice Buying, Selling: Get up to speed on the current market during the Home Health and Hospice: Buying, Selling and Valuing webinar and Q&A session. Partner Ben Bogan will be a keynote speaker during this informative offering presented by Irwin Levin Associates.

Merger and acquisition activity has picked up significantly in this sector, after a relatively quiet 2015. This fragmented industry continues to attract private equity and strategic buyers who are building larger networks among local companies and agencies. Some notable platforms have changed hands this year, and several more announcements are expected. Join our interactive webinar to find out what is in store for this market in the second half of 2016.

In this session you will learn:

  • Who’s buying what, and where
  • Who is selling in this seller’s market
  • Whether valuations can go higher still
  • How the changes in labor laws and reimbursement rules have impacted prices and valuations, particularly minimum wage and overtime laws

Click here to register and for more information. This educational offering is pending approval for 1.50 credit hours by the National Association of Long Term Care Administrator Boards (NAB). Upon webinar approval and enrollee’s successful completion of the test, Irving Levin Associates, Inc. will issue a NAB certificate of completion for students to issue to their state licensure boards.

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About Partner Ben Bogan: Prior to joining Stoneridge Partners, Ben was an attorney for a general law practice in Tucson, Arizona, where he was also selected as the Outstanding Pro Bono Attorney for his participation in Southern Arizona’s VLP program. He also served as Assistant District Attorney for the Allegheny County District Attorney’s Office in Pittsburgh, and Assistant District Counsel for the United States Army Corps of Engineers in New York, where he focused on Real Estate and Government Contracts. Ben has a BSBA in Economics from the University of Florida, and a Law Degree from Albany Law School.

Ben works from our Tucson, Arizona, office. You can reach him at [email protected], (239) 215-6777 or (800) 218-3944.

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The Stoneridge Partners Home Health Index Hits New High For FOURTH Month Running

For the fourth month running, the Stoneridge Partners Home Health Index has reached a new, all-time high for the month of July, rising 2.8% and surpassing the previous high in June. The index tracks the monthly average market values of three of the largest publicly traded home health companies, Almost Family (Nasdaq: AFAM), Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG).

The companies have seen their share prices rise generally throughout the first half of 2016, bouncing back from an early drop at the start of the year. Year to date, the index is up 14.12%, and 9.81% for the trailing 12-month period.

“Buoyed by strong M&A activity, the home health index is continuing to hit all-time market value highs,” said Rich Tinsley, president and CEO of Stoneridge Partners, which publishes the index. “Home health companies are taking new regulations in stride as measures continue to roll out from national payers.”

While the overall impact remains to be seen, initial reports are positive on CMS’ Pre-Claim Review Demonstration, which rolled out August 3 in Illinois and requires home health agencies to submit claims earlier in the care process for reimbursement. The demonstration will continue to roll out in Florida, Michigan, Texas, and Massachusetts in the coming months.

The upcoming demonstration did not seem to weigh on all home health companies, and AFAM was even looking at the potential upside for the industry despite initial administrative burdens.

“We feel CMS’ recently announced pre-claim review process, which may initially be somewhat burdensome, if properly implemented should serve to reduce real and perceived payment error rates and help build a relationship of trust between the program and providers that is critical to home health achieving its real potential in the health care delivery system,” said Almost Family President Steve Guenther in a second quarter earnings release.

Despite a bullish attitude and overall increase across the index, AFAM’s share price declined 5.42% in July. Year to date, the company’s stock is up 5.41%.

AMED had the biggest gains of the month and saw its share prices rise 7.94%. Year to date, AMED’s stock is up 38.85%. LHCG also saw gains, with its share price increasing 4.88% in July, though the stock is up just 0.22% year to date.

Though the index continued to climb in July, it did not outpace the S&P 500 during the month, which grew 3.56%, compared to just 0.9% in June.

Addus Homecare, which is not included in the index because very little of its revenue comes from Medicare, also saw gains during the month. Its share price rose 5.85% in July.

Quotes Of  The Month 

“Now, people are starting to see the value in home care. The silver tsunami is coming. People are going to need help in their homes,” said Tanika Aden, a 15-year home care worker from Washington state who spoke at the Democratic National Convention in Philadelphia. For the full article, click here: Home Care Takes Center Stage at Democratic National Convention

See It to Believe It!

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

  • Almost Family (AFAM)
  • LHC Group (LHCG)
  • Amedisys (AMED)

Please note the graphs representing (1) HH Index to the percentage change in the S&P 500 Index for over 14 years, (2) 12 month trailing chart of the HH Index, and (3) HH Index to the price of Addus stock (non-Medicare) can be found in the most recent issue of the Home Health Index.


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

Company 7/31/16 1 mos change YTD change 7/31/15 7/31/14
Almost Family 40.30 -5.42% +5.41% 43.76 23.44
Amedisys 54.49 +7.94% +38.58% 43.63 20.19
LHC Group 45.39 +4.88% +0.22% 40.27 23.48
HH Index* 46.73 +2.79% +14.12% 42.55 20.37
S&P 500 2173.60 +3.56% +6.34% 2103.84 1930.67
Addus 18.45 +-5.85% -20.75% 27.14 22.25

Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.

Enterprise Value (EV)

EV (in M) 7/1/2016 7/1/2015 7/1/2014
Almost Family 540 416 443
Amedisys 1890 1420 1670
LHC Group 911 742 670
HH Index Total 3341 2578 2783
Addus 232 311 180

 

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

Company 7/1/2016 7/1/2015 7/1/2014
Almost Family 97% 83% 65%
Amedisys 144% 119% 51%
LHC Group 110% 100% 69%
HH Index Average* 117% 101% 62%
Addus 67% 96% 83%

Multiples of EV/EBITDA.

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

Company 7/1/2016 7/1/2015 7/1/2014
Almost Family 12.63 12.77 16.96
Amedisys 23.64 16.02 19.72
LHC Group 11.08 11.26 8.60
HH Index Average* 15.78 13.35 15.1
Addus 9.68 13.28 10.50

*Included Gentiva prior to its acquisition in February 2015 by Kindred.

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 1. 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 its reporting.

Stoneridge Partners’ Recent Transactions: 

Arkansas: Kindred Healthcare, Inc. acquired the in-home healthcare operations for the Arkansas Department of Health for $39 million. Stoneridge Partners’ Associate Buyside Partner, Rhonda Gronberg, provided advisory services.

Other Recent Transactions From Around the Country:

  • Geneva Glen Capital recapitalized Southeastern Home Health Services, one of the largest independent Medicare home health providers in Pennsylvania.No financial terms were disclosed for the transaction.
  • Ensign’s home health and hospice portfolio subsidiary, Cornerstone Healthcare, acquired the assets of Hospice for Wright County. The hospice will be owned and operated by Heartland Healthcare  under the name Gateway Hospice.

Exclusively Listed for Sale by Stoneridge Partners:

  • Central Midwest – $5 million Medicare certified home health agency with small hospice operations. Strong bottom line and continued growth opportunities. Management team in place and outstanding clinical. Stoneridge File SBA-9010
  • Colorado – $2.5 million diversified home care agency  and hospice,  accredited with excellent books and records.  Stoneridge File SJL-1005
  • Florida – Accredited $4 million Medicare certified home health agency in District 5. More than 90% traditional Medicare. Highly motivated seller. Stoneridge File SBA-6226
  • Florida – Home care company in affluent area on west coast of Florida. $2.7 million run rate. Non-Medicare with 86% pure private pay. Consistent moderate growth. Caregivers are W-2 employees. Stoneridge File SDC-1253
  • Florida – $2.4 million Medicare certified home health agency in District 3. Outstanding clinical with highest star rating. Longtime Home Care Elite top agency. Excellent growth opportunities. Stoneridge File SBA-4836
  • Florida – $1.4 million accredited Medicare home health agency in District 8. Stoneridge File SBA-5224 
  • Florida – Accredited home health agency with approximately $850,000 in traditional Medicare revenue. Solid bottom line. 4.5 stars. Florida district 9.  Stoneridge File SDC-5177
  • Florida  – Lee County Medicare agency. Approximately $400,000 in revenue. Accredited. 4 1/2 star rating. Oasis quality assessment 97.7%. Florida district 8. Stoneridge File SBA-4186
  • Illinois – $5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS. Stoneridge File SDC-2734
  • Minnesota – $14 million revenue Medicare/Medicaid home health agency. Well established and deficiency free.  SJL-5268
  • New Jersey – Opportunity to enter much sought after New Jersey market via a small hospice in the southern part of the state. Stoneridge File SJL-9002a
  • Northwest – $3 million private pay home care.  Growing company with a strong bottom line. Last four surveys deficiency free. Stoneridge File SJL-3003
  • Ohio –  $4+ million Medicare/Medicaid agency located in NE Ohio. Stoneridge File SBA-8002
  • Oklahoma – Medicare certified hospice for sale in Central Oklahoma. $2.1 million run rate. Accredited. Multiple locations. Stoneridge File SBA-3881
  • Pennsylvania – $14 million Medicaid provider with history of steady growth and terrific referral pipeline. Current management will stay if desired. Stoneridge File SBB-6722
  • Pennsylvania – $4+ million hospice located in Western Pennsylvania. Stoneridge File SBA-5001
  • Pennsylvania – $2.8 million Medicare certified home health agency with small hospice operations in Eastern Pennsylvania. 72% traditional Medicare for home health. Great tuck-in opportunity for strategic buyer. Requires corporate support functions. Stoneridge File SBA-4227
  • Texas – $5 million home health agency in Houston (metro). Diversified agency – 70% Medicare, 30% private pay. Inherent capacity for growth.  Stoneridge File SJL-2000
  • Texas –  Growing $3 million west Texas Medicare certified home health agency. Accredited with a wide variety of referral sources. Stoneridge File SJL-2892
  • Texas – $1.9 million Medicare certified home health agency providing service to Region 2. More than 88% of revenue is from traditional Medicare. Stoneridge File SJL-3650
  • Texas – $1.2 million established and profitable home health agency with two offices and service area from Conroe to Galveston. Stoneridge File SJL-6249
  • Texas – $1.2 million home health Medicare provider. Showing upward trends. Staff in place. Stoneridge File SJL-3668
  • Virginia – $5 million Medicare certified home health agency. Great clinicals and reputation in the market for providing quality services. Stoneridge File SBB-8675
  • Florida – $4 million in pure private pay.  15% bottom line.  Accredited on the central east coast.  Stoneridge File SDC-3250. ON CONTRACT
  • Florida – $5 million Medicare agency located in the Tampa – St. Pete area.  Accredited, with solid bottom line.   Stoneridge File SBA-4109. ON CONTRACT
  • Massachusetts – $5 + million home health agency, primarily Medicaid, but also private pay and commercial insurance, plus Medicare certification. Zero deficiencies on last survey.  Stoneridge File SBA-9300. ON CONTRACT
  • Mid-Atlantic – $30 million Medicare/Medicaid agency with multiple branches in several states, including CON service areas. Long history and great reputation for quality care. Stoneridge File SBB-8300 ON CONTRACT
  • Pennsylvania – Approximately $2 million in revenue. Licensed for entire state of Pennsylvania, so ready for growth. Stoneridge File SJL-9991 ON CONTRACT
  • Pennsylvania – $1.8 million Medicare agency located in eastern Pennsylvania. 82% traditional Medicare. Growing agency with strong potential for future growth. Stoneridge File SBA-2745 ON CONTRACT
  • Texas – $7 million Houston-based Medicare home health agency with sister staffing company. Accredited, expertly run and growing. Stoneridge File SJL-1500 ON CONTRACT
  • Texas – $4.9 million well established Medicare provider in the Dallas/Ft. Worth metroplex. Deficiency free and showing positive growth. Stoneridge File SJL-4918 ON CONTRACT
  • Texas – $4.1 million Dallas based home care company. Well managed and showing strong growth trends for 2016. Stoneridge File SJL-6002 ON CONTRACT
  • Texas – $1.5 million all private pay agency located in Fort Worth, Texas. Excellent reputation, excellent reviews and extremely profitable. Stoneridge File SJL-5115 ON CONTRACT

To see more home care agencies and hospices exclusively listed for sale by Stoneridge Partners click here.

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.

Another Favorite from The New Yorker

 

 

 

 

 

 

 

 

 

 

 

 

For more cartoons and additional musings on the state of home care and what’s going on at Stoneridge Partners, visit our blog: Stoneridge Partners Blog

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As part of our continued Louisville expansion, Stoneridge Partners is pleased to welcome, Tina Mackin, as Director of Business Development.

Mackin,-Tina-headhot

 

 

 

 

 

 

 

 

 

 

 

 Home Health & Hospice Buying, Selling & Valuing Webinar on August 18th at 1:00 pm (EST)

 

 

 

 

 

 

 

 

 

 

 

 

 

From Rich Tinsley, Publisher of “The Home Health Index”. Rich can be reached by email at [email protected] or at 1-800-218-3944

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

Please follow us on Facebook  and Linkedin

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Stoneridge Partners Represents Kindred in recent Arkansas acquisition

NEWS RELEASE      Source: Kindred Healthcare, Inc.

LOUISVILLE, Ky. & LITTLE ROCK, Ark.–(BUSINESS WIRE)–Aug. 1, 2016– Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) and the Arkansas Department of Health (“ADH”) today announced that the parties have completed a previously announced agreement for Kindred to acquire the in-home health care operations (the “Agency”) from ADH, which includes licenses to provide home health, hospice and personal care services throughout the state of Arkansas, for approximately $39 million. Kindred reached an agreement with ADH following a state bidding process.

This Smart News Release features multimedia.
Stoneridge Partners Represents Kindred in recent Arkansas acquisitionView the full release here: http://www.businesswire.com/news/home/20160801006178/en/

In the transaction, Kindred acquired the Agency’s licenses to provide home health and personal care services in 69 counties and hospice services in 42 counties. As part of the agreement, Kindred agreed to retain all current employees and agreed to serve all current patients upon consent. Including the home health and hospice services that Kindred previously provided in Arkansas, Kindred now provides in-home healthcare services in 72 of the state’s 75 counties.

“We welcome the Agency’s caregivers to our team as we expand our Kindred at Home operations in Arkansas,” said Benjamin A. Breier, Kindred’s President and Chief Executive Officer. “We are excited to build on the state’s program and look forward to bringing our care and clinical protocols to these operations to improve the ability of patients to safely return home or to remain in their home.”

“The Arkansas Department of Health is pleased to have completed our agreement with Kindred on schedule, in order to assure continuity of care for patients and a smooth transition for staff,” said Nathaniel Smith, MD, MPH, Director of the Arkansas Department of Health and State Health Officer. “I am happy to see these services continue inArkansas and am glad that our dedicated staff will have a chance to keep providing these services.”

“I am pleased the transfer of services from the Arkansas Department of Health’s In-Home Services program to Kindred Healthcare has been completed,” said Asa Hutchinson, Governor of Arkansas. “The sale’s finalization is a great next step for both patients and employees of the program. I look forward to Kindred Healthcare continuing the efforts of ADH in the private sector and keeping patients connected to exceptional home health, hospice and care services in Arkansas.”

Our Associate Buyside Partner Rhonda Gronberg represented Kindred in this recent acquisition of the Arkansas Department of Health’s in-home health operations. Other media coverage includes: Home Health Care News and Biz Journals

Stoneridge Partners Represents Kindred in recent Arkansas acquisition

Rhonda Gronberg

Rhonda Gronberg has worked over 20 years in the financial industry with major companies, including ITT Capital, GE Capital Corp., Bank of Tokyo and PNC Bank. As a result, she has developed an impressive client base and professional network across the country. Throughout her career, Rhonda has worked with owners of small companies, as well as, CEO’s and CFO’s of large corporations in helping them assess capital equipment financing needs. As Associate Buyside Partner, Rhonda works with large corporate and regional buyers to locate, examine and close quality home health and hospice agencies across the country. Rhonda works in our Ft. Myers, Florida, office. Contact her at [email protected] or (800) 218-3944.


About Kindred Healthcare
Kindred Healthcare, Inc., a top-90 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $7.2 billion(1). At March 31, 2016, Kindred through its subsidiaries had approximately 102,000 employees providing healthcare services in 2,700 locations in 46 states, including 95 transitional care hospitals, 19 inpatient rehabilitation hospitals, 92 nursing centers, 20 sub-acute units, 618 Kindred at Home home health, hospice and non-medical home care sites of service, 104 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,752 non-affiliated sites of service. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for seven years, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information: Kindred Healthcare, Susan E. Moss, Senior Vice President, Marketing and Communications at 502-596-7296 or [email protected].
(1) Revenues based upon Kindred consolidated revenues for the twelve months ended March 31, 2016.


About the Arkansas Department of Health (ADH)
ADH is a centralized health department, operating health units in each of the state’s 75 counties. ADH works to protect, improve and promote the health of all Arkansans with the support of dedicated employees and public and private partners. Each year, Department employees monitor and investigate public health diseases and threats, provide preventive health services in clinical settings, enforce laws and regulations, support Hometown Health Improvement, promote healthy behaviors and respond to public health emergencies. For more information: Arkansas Department of Health / Office of Health Communications, Meg Mirivel, MA, Public Information Officer at 501-280-4768 or [email protected].

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