Hospice and home health care provider Addus HomeCare Corporation (NASDAQ: ADUS) has completed a $130 million purchase of Birmingham, Ala.-based Hospice Partners of American, LLC.
The $130 million purchase price represents $118 million of value, net the present value of $11.6 billion of estimated tax benefits, according to Addus. The Hospice Partners transaction was funded via Addus’ September stock offering.
Hospice Partners of America operates 21 hospice locations that serve a combined average daily census of 1,000 patients throughout Idaho, Kansas, Missouri, Oregon, Texas and Virginia.
“This acquisition represents a significant step in our strategy to add hospice services in markets where we already have a personal care presence and also provides a key strategic entry into the Texas market,” Dirk Allison, president and CEO of Addus, said. “We expect this transaction to be immediately accretive to our 2019 financial results. This is our fourth completed acquisition for 2019 and brings our total acquired annualized revenues to approximately $130.0 million to date.”
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% between 2000 and 2014. Only California experienced a higher rate of increase among their senior population.
Earlier this year, Cornerstone Healthcare Inc., a subsidiary of The Ensign Group (NASDAQ: ENSG) acquired Boerne, Tex.-based All County Home Care and Hospice for an undisclosed sum. Cornerstone followed up that transaction with the purchase of Texas-based Resolutions Hospice in May.
Along with Cornerstone, a number of hospice providers are zeroing in on the Texas market for growth 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.