LHC Group to Purchase Arizona Hospice, Palliative Care Providers

LHC Group, Inc. (NASDAQ: LHCG) will acquire two Mesa, Ariz.-based providers, East Valley Hospice and East Valley Palliative Care, expected to become effective on Jan. 1, 2021. 

This deal is consistent with LHC Group’s strategy of expanding its hospice business in markets in which the company already has a home health presence. LHC Group President Joshua Proffitt told Hospice News last month that hospice was a top strategic focus for the organization.

“We have a well-established and sizeable home health agency in the Phoenix market that operates under the brand At Home Healthcare (same brand operates in Tucson as well), and the addition of East Valley Hospice (and East Valley Palliative Care) in Mesa supports our co-location growth strategy of providing multiple services in certain markets where deemed appropriate, needed and feasible,” an LHC Group spokesperson told Hospice News in an email. “The activity we have announced so far is just the start of continued inorganic growth momentum we expect in [the fourth quarter], 2021, and beyond.”

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The company anticipates that the transaction will yield nearly $4.8 million in annualized revenue and that it will not materially affect its 2020 diluted earnings per share. The two companies will not rebrand.

LHC Group operates more than 100 hospice locations nationwide.

Demographic tailwinds have been heating up the Arizona market during 2019 and 2020. 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.

In 2018, Arizona had the third-highest number of Medicare decedents who died in hospice at 58.8%, according to the National Hospice & Palliative Care Organization (NHPCO).

“We look forward to welcoming the teams at East Valley to our LHC Group family of providers,” said Keith Myers, LHC Group chairman and CEO. “We share a mission and vision to provide high-quality, in-home service to those who place their trust in us. Together, we will be able to bring hospice and palliative care to even more patients and families in Mesa and the surrounding Phoenix metro area.”

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