Home Health Index Pick Ups in October
After two months of relative decline, the average market value of three of the largest publicly-traded home health care companies rose slightly in October. Bucking the most recent downward trend, the Home Health Index tracked by Stoneridge Partners rose 0.79% in October. By comparison, the index, which tracks the market values of Almost Family (Nasdaq: AFAM), Amedisys Inc. (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), contracted 12.63% in September.
The index outpaced the S&P 500 during the month, which rose just 0.54%. However, the index is still lags its year-to-date value by 0.64%, while the S&P 500 has risen 6.66% year to date. Prior to its recent decline, the index was consistently hitting new all-time highs from May through August. Valuations are still strong.
“The index has plateaued the last couple of months, yet valuations remain strong and we expect those strong gains for sellers to continue into 2017,” said Rich Tinsley, president of Stoneridge Partners.
While the index ticked up overall, not all three companies tracked saw gains in October. During the month, Almost Family’s stock dipped slightly, dropping 0.38% from September. Year to date, the stock is down 4.19%. Despite this, the Louisville, Kentucky-based company has been highly acquisitive throughout the year.
Amedisys was the only company of the three to see its stock price rise during the month, jumping 4.32%. Amedisys’ stock price has risen 25.86% year-to-date, outpacing the S&P 500 and its industry peers. Amedisys is the second largest home health care provider and has recently overcome the impacts of natural disasters in its headquarters of Baton Rouge, Louisiana.
At the same time, Lafayette, Louisiana-based LHC Group’s stock price declined 0.95% in October. The provider has experienced the biggest hits among the three indexed companies, with its stock price down 20.67% year to date. LHC Group has also been very acquisitive throughout the year, though the company downgraded its targeted pipeline earlier this year in light of the impacts of the Pre-claim Review Demonstration from the Centers for Medicare & Medicaid Services (CMS).
Addus Homecare, another major home health care provider which is not tracked in the index because little of its revenue comes from Medicare, saw its share prices drop 4.93% from September. By comparison, Addus had been outperforming Almost Family, Amedisys and LHC Group as of late, with a huge jump of 38.71% in September.
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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||10/31/16||1 mos change||YTD change||10/31/15||10/31/14|
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)||10/31/2016||10/31/2015||10/31/2014|
|HH Index Total||2979||2653||1799|
Enterprise Value (EV), aka Selling Price, as a Percent of Revenue.
|HH Index Average*||97%||104%||68%|
Multiples of EV/EBITDA.
Think of this as selling price as a multiple of EBITDA.
|HH Index Average*||1351.2||13.0||NA|
*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.
SOLD BY STONERIDGE!
- Blessed Trinity Home Health Care, Inc. in Bonner Springs, Kansas was acquired by Carter Healthcare. Partner, Ben Bogan, provided sell side advisory services.
- Home Care Partners in Monroe Township, NJ sold to CareFinders Total Care. Partner, Ben Bogan, provided sell side advisory services.
- Lighthouse Healthcare, Inc. in Springfield, VA was acquired by Encompass Home Health. Partner, Brian Bruenderman, provided sell side advisory services.
Recent Transactions From Around the Country:
- Amedisys, Inc. closed on the acquisition of Visiting Nurse Association of Long Island, a nonprofit organization based in Garden City, New York.
- Addus HomeCare Corporation, a provider of home and community-based serices, acquired South Shore Home Health Services, Inc., a New York state-licensed home care agency primarily providing personal care services.
- Epic Health Services completed two acquisitions, the first being Pediatria Healthcare for Kids, a pediatric home healthcare company based out of Georgia that offers skilled nursing and therapy services. Epic also doubled their market share in Pennsylvania with the acquisition of Firstaff Nursing Services which provides adult home health care and nursing services.
- Senior Helpers, a provider of in-home senior care, was purchased by Altaris Capital Partners, LLC, a leading healthcare investment firm.
- Leading Health Care of Louisiana acquired Absolute Care Providers a healthcare company based in Baton Rouge.
Exclusively Listed for Sale by Stoneridge Partners:
- Colorado – $2.5 million diversified home care agency and hospice, accredited with excellent books and records. Stoneridge File SJL-1005
- Florida – $4 million in pure private pay. 15% bottom line. Accredited on the central east coast. Stoneridge File SBA-3250
- Florida – Located in the Orlando area this is a $4 million diversified home health agency. Payor sources include Medicare, Medicaid and private pay, 35% of which is traditional Medicare. Top management will assure smooth transition. Well run with excellent financial records and solid bottom line. Stoneridge File SDC-3739
- 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 SBA-1253
- Florida – $2.5 million Medicare agency in Port St. Lucie. Great repuation and clinicals. Stoneridge File SBB-6191
- 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 growing private duty business in District 7. Well-run clinically and poised for growth FY 2017. Stoneridge File SCM-5220
- Florida – $1.4 million accredited Medicare home health agency in District 8. Stoneridge File SBA-5224
- Illinois – $5.5 million accredited Medicare agency located in northeastern Illinois. Strong bottom line. 4 1/2 star rating by CMS. Stoneridge File SBA-2734
- Illinois – $3.4 million Medicare deficiency free home health agency in Northern Illinois. This agency has built its success by concentrating on a very profitable and loyal market niche, and has an outstanding reputation with both their patients and community. Stoneridge File SCM-3291
- Illinois – $1.5 million Medicare certified home health agency. Clean survey and deficiency free. Quality clinical operation with staff in place. Stoneridge File SBA-7425
- Illinois – Opportunity to establish a Medicare certified home health agency. Pristine license in state under moratorium. Medicare certification. Accredited. Stoneridge File SBA-5000
- Michigan – $1.8 million Medicare agency located in high-end resort community. Stoneridge File SBB-5471
- Minnesota – $14 million revenue Medicare/Medicaid home health agency. Well established and deficiency free. Stoneridge File SJL-5268
- Missouri – $2.8 million Medicaid agency in greater St. Louis area. Nice bottom line. Excellent add-on acquisition opportunity. Stoneridge File SBB-9001
- 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 – $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 – $4.1 million Dallas based home care company. Well managed and showing strong growth trends for 2016. Stoneridge File SJL-6002
- Texas – $3.5 million home health agency in Houston (metro). Diversified agency – 70% Medicare, 30% private pay. Inherent capacity for growth. Stoneridge File SJL-2000
- Texas – $3.2 million hospice in McAllen, Texas. CHAP accredited with a solid reputation. Stoneridge File SJL-1112
- Texas – Profitable $3 million Medicare & Medicaid home care company in East Texas. Well-run with an excellent reputation, full staff in place and a 4.5 star rating. Stoneridge File SJL-9472
- Texas – Growing $3 million west Texas Medicare certified home health agency. Accredited with a wide variety of referral sources. Stoneridge File SJL-2892
- Texas – $2.6 million established home health agency in Dallas with both Medicare and Medicaid lines of business. Stoneridge File SJL-8335
- Texas – $2 million Medicare accredited home health care company located in East Texas. Strong financials, clinically clean with nice opportunity for growth. Stoneridge File SCM-9753
- Texas – $1.3 million profitable Medicare and Medicaid agency located in a growing market just north of Dallas. Clean clinically with excellent financials. Stoneridge File SJL-1492
- Texas – Established and profitable $1.2 million private pay agency located in the Dallas/Fort Worth metroplex. Clean surveys with all appropriate staff in place. Stoneridge File SJL-1373
- Texas – $1 million agency in Tyler, Texas. Excellent opportunity to break into the attractive market. Stoneridge File SJL-8967
- Wisconsin – $1.2 million Medicare certified home health agency. Licensed in Wisconsin. Clean survey and deficiency free. Staff in place. Motivated seller. Stoneridge File SBA-5776
- Florida – Located in the huge east coast Florida District 9, this is a $6 million Medicare agency with approx. 98% of revenue coming from traditional Medicare. Very well run with excellent financial records and solid bottom line. Stoneridge File SDC-7429 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
- 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. 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
- 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 ON CONTRACT
- Pennsylvania – $14 million Medicaid provider with history of steady growth and terrific referral pipeline. Current management will stay if desired. Stoneridge File SBB-6722 ON CONTRACT
- Pennsylvania – $4+ million hospice located in Western Pennsylvania. Stoneridge File SBA-5001 ON CONTRACT
- Pennsylvania – Approximately $2 million in revenue. Licensed for entire state of Pennsylvania, so ready for growth. Stoneridge File SJL-9991 ON CONTRACT
- Texas – $7 million Houston-based Medicare home health agency. 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 – $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
- Texas – $1.2 million established and profitable home health agency with two offices and service area from Conroe to Galveston. Stoneridge File SJL-6249 ON CONTRACT
- Texas – $1.1 million solid and clean Medicare home health agency located in the Fort Worth area. Stoneridge File SJL-7530 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 Cartoon Favorite From the New Yorker
Stoneridge Partners is exhibiting at Decision Health’s 19th Annual Private Duty Conference in Las Vegas today through Wednesday.
Stop by Booth 202 to meet the team sample those famous Kentucky bourbon balls. We also be available for confidential meetings throughout the conference. To schedule a private meeting, please call (800) 218-3944.
From Rich Tinsley, Publisher of “The Home Health Index”. Rich can be reached at [email protected], (502) 822-4510 and toll-free 800-218-3944