Cincinnati-based Queen City Hospice has agreed to acquire an unnamed hospice provider in Cleveland that will do business as Miracle City Hospice. The transaction is part of an aggressive growth strategy to nearly double the Queen City footprint. Financial terms were undisclosed.
Queen City Hospice is a portfolio company of the private-equity firm Stonehenge Partners Inc. The company’s hospice operations extend to Columbus, Ohio, under the brand Capital City Hospice, and to Dayton under the name Day City Hospice. In total, Queen City and its subsidiaries care for close to 1,000 patients per day and employ more than 600 staff.
“We are unequivocally focused on personalized and exceptional quality of care. The fact that we continue to grow at a rapid pace is a direct correlation to our passion and dedication of patient-centered hospice care,” said James Vannelle, CEO of Queen City Hospice. “Cincinnati, Dayton and Columbus families have gravitated to our high level of personalized care, so expanding into Cleveland and the Northeast Ohio market proved to be a logical step in our expansion.”
Vannelle will also be CEO of Miracle City Hospice, but will hire a local management team. The transaction was an asset license purchase, and the acquired provider has no patients or staff. Vannelle told Hospice News that the deal should close within 30 days and Miracle City will begin admitting patients in the fourth quarter. The hiring process for Miracle City staff is expected to begin next week.
“We’re going to take our philosophy and our culture to northeast Ohio and aggressively recruit top talent and then turn them loose to exceed expectations for patients and families,” Vannelle said.
Queen City is working with the mergers and acquisitions advisory firm Footprint Capital to identify further targets in its home state as well as locations in neighboring Pennsylvania and other out-of-state markets.
Hospice utilization in Ohio during 2018 reached 56.7% Ohio ranks sixth in the nation for hospice utilization among Medicare decedents at 56.7% as of 2018, according to the National Hospice & Palliative Care Organization.
Demographic tailwinds are expected to fuel further hospice growth in Ohio, where more than 17% of the state’s 11.5 million residents were 65 and older as of 2018, according to the U.S. Census Bureau. The Mid-Ohio Regional Planning Commission estimates that this percentage would likely double by 2050.
Though M&A in the hospice space slowed during the first and early second quarters due to the pandemic, since then activity has been ticking upwards. Middle-market, private-equity backed hospices such as Queen City have been particularly dynamic in recent weeks.
Queen City has seen significant same-store growth during the pandemic in addition to its pursuit of acquisitions and sees more transactions on the horizon.
“We’ve grown through COVID with record admission months and census growth. In the three cities where we currently operate our legacy programs, we weathered the storm in terms of the challenges that were presented to us. The M&A activity slowed, but our focus was really on our patients and families and as well as our employees,” Vannelle told Hospice News. “We’ve grown through COVID and are back in the M&A market. We are certainly looking for opportunities, and we will continue to pursue them in the rest of this year into next year.”