LHC Group (NASDAQ: LHCG) has teamed up with two Northeast hospice providers in a joint venture expected to glean $35 million in annual revenue.
LHC purchased a majority share and will take over management of Geisinger Home Health and Hospice and AtlantiCare Home Health and Hospice, serving patients in New Jersey and Pennsylvania.
The companies expect the joint venture agreement will close in April for Pennsylvania locations and in June for New Jersey locations. According to LHC this venture will not materially affect its 2019 diluted earnings share.
“We have a long history of providing high quality and compassionate home health and hospice care,” said Jaewon Ryu, M.D., J.D., Geisinger interim president and CEO. “We are excited to find a partner with a similar commitment to quality and service. Patients and families can continue to look to us for these important health care services.”
The partnership raises LHC Group’s footprint in the Northeast, adding four hospice locations in Pennsylvania and one in New Jersey, in addition to eight new home health locations. Post-closing LHC will operate a total of 52 hospice and home health locations in those states.
LHC Group, Inc., provides a suite of health care services, including hospice care, in 36 states and states that its 32,000 employees reach 60% of U.S. adults age 65 and older.
The company anticipates further joint venture and acquisition activity during 2019.
“We expect more of the same in 2019 with both large and smaller partners. Our acquisition pipeline is robust, and we continue to review 15-20 highly vetted transactions at any given time,” said an LHC Group spokesperson.
The company completed a joint venture partnership with Arkansas-based Unity Health on Jan. 31 that included shared ownership of White County Medical Center Home Health and Unity Health-Medical Center Home Health. The venture anticipates annual revenue of $4 million.
During 2018 the company entered into a joint venture with Brentwood, Tenn.-based Lifepoint Healthcare, sharing ownership of LifePoint’s hospice and home health operations. This joint venture began with 10 hospice locations and added four more within its first year, Home Health News reported. Last year the LHC-Lifepoint joint venture acquired the home health and hospice care providers Guardian Health Services and Commonwealth Health Care.
LHC in April 2018 completed a merger with home health and hospice provider Almost Family in an all-stock transaction with an implied value of $2.4 billion.
“LHC Group has the benefit of a relatively low-leveraged balance sheet with increasing free cash flow along with the proven capabilities to quickly and fully integrate these acquisitions,” an LHC spokesperson said. “It will be a major component of our growth going forward.”