Private equity-backed Bristol Hospice has completed its third acquisition of the year with the purchase of Remita Health for an undisclosed sum. Remita Health provides Hospice Care in California, Arizona and Nevada.
Bristol is a portfolio company of the PE firm Webster Equity Partners, which acquired the company in 2017. Remita is also supported by private equity and prior to this transaction was jointly owned by SV Health Investors, Petra Capital Partners and Bessemer Ventures.
Edgemont Partners, a middle-market health care investment bank, served as Remita’s financial advisors during the deal.
“We ran a pretty competitive strategic only process for Remita. I had experience with Bristol Hospice. I sold them an asset about two years ago called Optimal Health Services,” Eugene Goldenberg, managing director at Edgemont, told Hospice News. “[Bristol and Remita] were familiar with each other one because they competed in the California market, and they also had a prior transaction between the two parties in early 2019 where the San Diego office of Remita was acquired by Bristol. So there was a pre-existing relationship between the two firms. “
Bristol has been on a strong growth trajectory for the past several years and has been very active in the M&A space during 2020.
The company in August purchased the hospice components of California-based Visiting Nurse Association of the Inland Counties (VNA). A second company, HealthSure Management Services, acquired VNA’s home health assets. Financial terms were confidential.
Earlier in the year Bristol acquired the Utah and California locations of Sojourn Hospice & Palliative Care, a Healthy Living Network company, for an undisclosed amount.
The Remita deal expands Bristol’s California footprint and marks their entry into the Arizona and Nevada markets.
“[Remita] had a contiguous state footprint in California and Nevada and Arizona. California is the largest hospice market in the country, and even though it definitely has a challenging labor market and operating environment for any business, being in the largest hospice market is important,” Goldenberg told Hospice News. “Arizona is also a very attractive hospice market given the size of the senior population there. And then there is the immediate market density. Remita has four branches in California that were concentrated in the [Los Angeles] area, so you have a dense market footprint and local scale.”
The deal was Edgemont Partners’ first transaction in the hospice space. The bank intends to be much more active in that market going forward, as signaled by the firm bringing Goldenberg on board in January. Goldenberg has rich experience in hospice M&A, including an eight-year tenure at Cain Brothers.
Record-high valuations in the hospice space, demographic tailwinds and the industry’s financial resilience to the COVID-19 pandemic signaled to Remita and its private equity backers that the time was ripe to sell the company. These factors have been fueling a robust industry-wide M&A market throughout 2019 and 2020, a trend that many expect to proceed into 2021.
“Hospice valuations are at an all-time high. There’s going to be more demand for hospice services and just more appetite from investors, post-COVID. Among community-based providers that have held up very well through the pandemic, hospice in particular was one area that was able to basically stay flat or in some cases even grow,” Goldenberg said. “In instances where they did take a hit, it was very temporary. Most providers in the hospice space are operating at above pre-COVID levels. Whereas if you look at other sectors of health care, those businesses are still hurting because they’re still not operating at full capacity.”