Valeo Home Health & Hospice has acquired Hearts for Hospice & Home Health in Utah for an undisclosed sum. Valeo is a portfolio company of the private equity firm Grant Avenue Capital.
Grant Avenue purchased a majority stake in Valeo this past January, marking the company’s first investment in the hospice space. When announcing that transaction, Buddy Gumina, Grant Avenue’s founder and managing partner, indicated that the firm was going to keep their foot on the gas when it comes to Valeo’s growth and continue to build a larger home-based care platform.
“The outstanding team at Hearts is well known in the market for providing exceptional care to individuals and their families,” Gumina said. “We plan to accelerate the expansion of Hearts, Valeo, and our overall home-based care platform through continued investment in the clinical and leadership teams combined with strategic acquisitions, partnerships and de novo launches.”
Hearts was a division of Abode Healthcare, which itself was recently acquired by BrightSpring Healthcare for a reported $775 million, according to PE Hub.
Valeo since its founding in 2011 has served more than 6,000 patients in Salt Lake City and surrounding counties in its home state. The Hearts transaction builds out Valeo’s service area in Utah. The state leads the nation in hospice utilization, with 60.8% of Medicare decedents electing those services in 2018, according to the National Hospice & Palliative Care Organization. The national average for that year was 50.3%.
This transaction is Grant Avenue Capital’s sixth corporate carve-out since the firm opened its doors in 2019. Following the Valeo and Hearts transactions, the firm plans a broader buy-and-build initiative to complete acquisitions and strategic partnerships in the home-based care sector. While the space is new to Grant Avenue, several of the firm’s members have experience with home health and hospice investment.
Private equity activity in the hospice space hit record highs in 2020, with buyers largely driven by demographic tailwinds, rising utilization and the need to build scale for participation in value-based payment models such as Medicare Advantage or the Center for Medicare & Medicaid Innovation’s direct contracting programs. On the seller side, record high multiples for hospice companies have made investor-owners’ mouths water. Multiples reached as high as 26x in 2020.