The Hospice of Randolph County (HRC) and Hospice of the Piedmont (HOP), both in North Carolina, will merge effective Sept. 30, the second large nonprofit hospice merger in the region this year.
HRC will continue doing business as Hospice of Randolph County, a subsidiary of Hospice of Piedmont, pending regulatory approvals and approval from the two organizations’ boards, with a blended leadership structure. Trent Cockerham, CEO of HOP will serve as CEO of the combined organization, while HRC CEO Rhonda Moffit will named president and COO.
An integration team will work to make the transition as smooth as possible for staff, patients and families. Neither organization will reduce staff as a result of the merger.
This is the latest instance of an emerging trend in which nonprofit hospices merge or form coalitions to remain competitive with for-profit firms entering the space in larger numbers.
“Last year, there was significant investment in the for-profit hospice provider space in North Carolina. Consistent with national trends, for-profits account for more than two-thirds of all hospice providers nationally and more than one-half of all hospice providers across our service area,” said Trent Cockerham, President and CEO of HOP. “These developments, along with a host of other considerations, help create opportunities in an increasingly crowded hospice marketplace.”
HRC and HOP combined cared for more than 2,000 hospice patients in 2018 across their eight-county service area. Each organization provides hospice care in patient residences, as well as inpatient services at HRC’s 16-bed Randolph Hospice House and HOP’s 18-bed Hospice Home at High Point. The organizations also provide bereavement services and palliative care programs.
“Through this merger, we will create greater capacity to serve our communities while maintaining the core values that guide our care each day,” says HRC CEO Rhonda Moffitt. “Together, we will build upon the strengths of each organization in order to create new opportunities for service and growth.”
M&A activity among hospices will likely continue to rise during 2019 and beyond, regardless of organizations’ tax status, as providers consolidate and more private equity investors turn their eyes towards the space. Hospice valuations have reached record highs in recent years, multiples for hospice providers have climbed as high as 16 and 19 times EBITDA.