AngMar Medical Holdings, Inc. has acquired two hospice providers in Texas, Graham Regional Hospice and Reliable Hospice. The hospices were purchased for an undisclosed sum.
These acquisitions mark the second and third hospice transactions completed by AngMar since October 2019. The company entered the hospice market with its October purchase of an unnamed company that now operates under the brand Angels Care Hospice. The newly acquired companies will also fall under the Angels Care brand.
“Those two locations represent a move to have an overlapping coverage with some very prominent home health providers that [AngMar owns]. Our overall plan for acquisitions is to acquire hospices and locations where we have a good solid, trustworthy home health presence,” Tony Miller, chief operating officer for AngMar told Hospice News. “It was important to us to expand within the Texas market, because Texas is where the ownership of our company started with home health. It’s where we have some of our larger providers.”
Demographic tailwinds have been fueling a thriving hospice market 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.
Texas ranks 13th among the states in hospice utilization, with 52.1% of Medicare decedents electing hospice in 2017, according to the National Hospice & Palliative Care Organization. Utah has the highest rate of utilization at 59.4%.
As with many M&A transactions in the hospice space during the first and second quarters of the year, the AngMar acquisitions experienced some delays due to the COVID-19 pandemic.
“We were already in negotiations with both of them prior to the pandemic, but because of some regulatory requirements that needed to be completed prior to the sale and the shutting down of the state in some instances, it actually delayed,” Miller said.
AngMar works with a brokerage firm to identify potential acquisitions in their target markets, which tend to concentrate on opportunities to co-locate a hospice with their existing home health operations. Other factors the company considered when choosing to enter a market is hospice utilization in that region, the concentration of seniors who reside in the community and areas with low hospice saturation, Miller explained.
AngMar is pursuing an aggressive growth strategy that will rely heavily on acquisitions, but also include de novos. The company plans six to eight hospice transactions for 2020, with double that number in the pipeline for 2021.
Angmar is in the process of opening a de novo in Arizona, and Miller indicated that the company would pursue new locations in markets where it is currently eyeing acquisitions if those potential deals do not come to fruition.
“We have leads in different areas of Texas, and one lead in an area of Oklahoma. But if indeed those leads don’t produce a viable acquisition in the next three to four months, we’re looking at starting de novos,” Miller told Hospice News. “They’re good markets for us from a home health standpoint. They are underserved communities, so it makes sense for us to be there.”