Cornerstone Acquires Resolutions Hospice

Cornerstone Healthcare Inc., a subsidiary of The Ensign Group (NASDAQ: ENSG), as of May 1 acquired the assets of Texas-based Resolutions Hospice for an undisclosed amount.

Cornerstone subsidiaries now operate 26 hospice operations, 25 home health operations, and nine other home care operations across 12 states.

Prior to this transaction Resolutions Hospice was a family-owned business operating primarily in the Austin and Houston areas, with other Texas locations. CEO Joi Bodine founded the company in 2005, a year after her own father’s death.

The organization offers home health aides, counseling, medical social services, medical supply services, nursing services, occupational therapy, physician services, physical therapy, short term inpatient care, and speech pathology services.

“The Resolutions Hospice team has built a reputation for exceptional, patient-centered hospice care,” said Cornerstone CEO Daniel Walker. “We look forward to building upon that reputation as we seek to provide life changing service in these key Texas markets.”

The hospice merger and acquisitions market has been robust in recent years, with several top providers such as Amedisys, LHC Group, and others prioritizing expansion of their hospice footprint through acquisitions.

Earlier this year, Cornerstone acquired Boerne, Tex.-based All County Home Care and Hospice for an undisclosed sum, but the company is not alone in pursuing opportunities in Texas. A number of large providers are zeroing in on the Texas market during 2019.

VITAS Healthcare’s Inpatient Hospice Unit in late February began accepting patients in a new dedicated wing of Methodist Dallas Medical Center. The $2.8 million, 13,000-square-foot facility is expected to care for 800 hospice patients annually.

The nonprofit Hospice of Wichita Falls in February expanded its operations into northern Texas, financed through $12 million in donations. Also in February Traditions Healthcare Holding Company, LLC, a portfolio company of Dorilton Capital Advisors LLC, purchased Tyler, Tex.-based Hospice Connection.

Also in an earnings conference call this week, Amedisys CFO Scott Ginn indicated that the company “really has [its] eye on Texas” in regards to M&A.

“Lots of factors make Texas attractive market. The state’s demographics and size are favorable,” said Richard Tinsley, president CEO of health care M&A firm Stonebridge Partners. “Also, Texas is a not certificate of need state, and the number and size of current providers relative to the population that uses hospice makes Texas look underserved on multiple fronts.”

Demographic tailwinds are a significant driver of hospice providers’ interest in Texas. The Lone Star State has the third largest elderly population in the nation, according to the Texas Demographic Center, a state institution. The number of Texans 65 or older grew by 49.5 percent between 2000 and 2014. Only California experienced a higher rate of increase among their senior population.

“Texas continues to present many opportunities for growth in each of our service lines,” said Christopher Christensen, Ensign’s president and CEO. “Through disciplined and strategic growth, we have been fortunate to develop a strong presence throughout the state of Texas, and this acquisition presents an excellent opportunity to expand our continuum of care by providing hospice services in the Austin and Houston markets.”

In announcing the acquisition, Walker indicated that Cornerstone continues to actively seek hospice and home health acquisitions throughout the United States.

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