Maryland-based Hospice of the Chesapeake has signed a letter of intent to acquire the Hospice of Charles County. Financial terms of the transaction are yet to be determined pending a 30-to-60 day conditional discovery period.
When the deal is executed, it will expand Hospice of the Chesapeake’s geographic footprint to three counties in the organization’s home state and increase its average daily census to 600. A decision on whether Hospice of Charles County will rebrand under the Chesapeake name is forthcoming.
“Both Hospice of the Chesapeake and Hospice of Charles County share a long-standing community legacy and a shared history of grassroots volunteer creation. We are committed to honoring both those legacies and the communities that have supported the organizations,” Sandie Dillon, communications director for Hospice of the Chesapeake, told Hospice News. “We believe there is much to be gained by like-minded nonprofit hospices seeking to collaborate, partner and merge/acquire when and where appropriate not only in our area but across the country.”
The hospice industry has trended toward increased consolidation in recent years with the M&A market growing increasingly robust. Though the COVID-19 pandemic slowed and delayed transactions during the first part of the year, activity is expected to rebound in the third and fourth quarters, with the caveat that the outbreak’s trajectory will be hard to predict and has the potential to cause further disruption.
A number of nonprofits in particular nationwide have merged, fulfilled acquisitions or otherwise affiliated in regional collaborations to maintain and improve their ability to compete with large for-profit players in the hospice space.
“I am excited to share this news with our community and to take the next steps towards finalization with the Hospice of the Chesapeake leadership team. We believe Hospice of the Chesapeake shares our values of community, quality, and service, as evidenced by their long-standing support to the communities they serve.” said Chris Becker, chairperson of the Hospice of Charles County board of directors, in a statement. “I believe that joining the Hospice of the Chesapeake organization will bring strength and stability to the care we provide while simultaneously honoring our roots in Charles County.”
The transaction will allow Hospice of the Chesapeake to bring its diverse range of services to Charles County. In addition to hospice services, Chesapeake providers home-based palliative care, additional supportive care and operates freestanding inpatient centers.
Many in the hospice industry see service diversification as a business imperative to ensuring that hospices, particularly smaller community-based organizations, remain financially viable in order to support their mission. Many stakeholders in the hospice community see palliative care as an avenue for substantial growth. Currently, hospices provide about 50% of the home- and community-based palliative care in the United States.
Chesapeake’s palliative care program in 2019 rebranded as Chesapeake Supportive Care.
“Hospice of the Chesapeake and Hospice of Charles County have had a long history of collaboration, we share many of the same referral sources and it is a contiguous county geographically to our current footprint,” Dillon said. “It’s difficult for hospices of smaller size, like Hospice of Charles County which has an [average daily census of 40-45, to adjust to the rapidly changing hospice industry and support growth of new services like palliative care.”