Three Oaks Hospice Opens Its Doors, Completes Three Acquisitions

Private equity-backed Three Oaks Hospice, based in Texas, has acquired three hospice agencies in Dallas, Fort Worth and San Antonio. Three Oaks began operating in May.

The three acquisitions — Total Hospice & Palliative Care, ABS Palliative and Hospice Care and Fellowship Hospice — increase the hospice’s referral network to more than 200 sources, enabling the agency to provide 84,000 days of care annually. Financial terms of these transactions were not disclosed.

Three Oaks Hospice has received more than $21 million in private equity from Granite Growth Health Partners, Health Velocity Capital and Petra Capital Partners.

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“”We started Three Oaks Hospice because there is a need to serve the underserved markets of those patients who’ve been diagnosed with a life-limiting illness,” Andrea Bohannon, CEO of Three Oaks Hospice, told Hospice News. “With no serious consolidation in the last several years of the over 4,500 hospice providers, we see an opportunity to leverage our collective experience to not only consolidate a fragmented industry, but to also innovate through technology that can further improve the quality of care and better serve the families of our patients. And just as important, we plan to pursue organic growth opportunities through our existing markets.”

The Texas hospice M&A market has been heating up during 2019, largely due to favorable demographics and the fact that Texas is not a certificate of need state.

Texas 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% between 2000 and 2014. Only California experienced a higher rate of increase among their senior population.

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 earlier this year, Amedisys CFO Scott Ginn indicated that the company “really has [its] eye on Texas” in regards to M&A.

Three Oaks plans for continued growth throughout the state and the surrounding region, with five additional acquisitions in its pipeline.

“I want us to complete the footprint in Texas as soon as possible,” Bohannon said. “Then, we will begin the build out to other strategic underserved hospice markets outside of Texas.”

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