Durable medical equipment (DME) provider Hospice Source, which primarily services the hospice market, has purchased DME company Superior Healthcare, Inc. of Martinez, Calif. Financial terms were not disclosed.
Hospice Source is a portfolio company of Dallas-based Transition Capital Partners, family office-funded private investment firm founded in1993. The firm is affiliated with the Patterson Thomas Family Office.
“Hospice Source is committed to providing exceptional patient care to all its hospice partners,” said Hospice Source CEO Jeff West. “The acquisition of Superior Healthcare allows us to extend that passion for service to a greater number of northern California hospice patients and hospice partners. We welcome our new team members, hospice partners and patients to the Hospice Source family.”
Hospice Source operates 62 locations across multiple states.
Family offices in general are becoming increasingly interested in the hospice space for the same reasons as many private equity firms: demographic tailwinds from the aging population and rising demand. These are typically family units who incorporate, pool financial resources and purchase business assets, typically with representation by a banker or broker.
A family office is more likely to retain current management and offer them much more autonomy than other types of buyers. Though the Hospice Source transaction involves vendors, family offices are become more prevalent in the hospice market itself as well.
In California, hospice utilization among Medicare decedents in California reached 46.1% during 2018, compared to a national average slightly higher than 50%, according to the National Hospice & Palliative Care Organization. Utah has the highest utilization in the country at 60.5%
The California population is aging at pace faster than many other states. According to the state’s Department of Aging, the number of seniors in California is expected to double between 2010 and 2030, and increase 166% between 2010 and 2060.