The Pennant Group, Inc. (NASDAQ: PNTG) has acquired Prime Hospice, located near Phoenix, and Harmony Hospice of Arizona in the northwestern region of that state. Financial terms for the transactions have not been disclosed. The company expects to complete a third acquisition in a matter of days, also in the Southwest.
Pennant, which owns and operates hospice provider Cornerstone Healthcare, was spun in 2019 off from The Ensign Group (NASDAQ: ENSG). Pennant retained Ensign’s hospice, home health and senior living operations.
“We are excited about our continued growth in Arizona, where we have become a leading provider of hospice care,” said Brent Guerisoli, president of Cornerstone Healthcare. “We have been following Prime and Harmony closely for a number of years and have been impressed by their firm commitment to quality patient care and their excellent relationships in the local health care communities. We welcome their teams and look forward to building upon their past success within our cluster-centered operating model.”
Demographic tailwinds have been heating up the Arizona market during 2019 and 2020. In 2017, Arizona had the second-highest number of Medicare decedents who died in hospice at 59.2%, trailing only Utah at 59.4%, according to the National Hospice & Palliative Care Organization (NHPCO).
Currently, 17.5% of the state’s nearly 7.2 million residents are age 65 or older, according to the U.S. Census Bureau. By 2050 that number is expected to rise to 21%, according to the Arizona Department of Health Services (ADHS). Between 2010 and 2015 ADHS anticipates that the number of Medicare-age residents in the state will increase 174% and that the number of seniors older than 85 will quadruple from 2010 levels.
Pennant has indicated that the company has their eye on hospice growth during 2020, with the potential for future acquisitions as the year proceeds.
“These acquisitions are a great example of an off-market opportunity resulting from relationships we developed over many years,” said Pennant CEO Daniel Walker. “We continue to source a number of off-market opportunities and marketing offerings as understanding of our innovative operating model, patient-centered approach to care, and emphasis on healthy culture continues to spread within the industry,” he added.