LHC Group (NASDAQ: LHCG) has agreed to acquire Fruitland, Idaho-based Heart ’n Home Hospice. The transaction expands LHC Group’s Idaho footprint and marks the company’s first entry into the Oregon hospice market. Financial terms of the deal are confidential.
The acquired company operates six locations in its home state of Idaho as well as four in central and eastern Oregon under two brands: Heart ’n Home Hospice and Treasure Valley Hospice. These locations will keep their current names post-transaction.
“Heart ’n Home Hospice has played a vital role in this region with a mission and vision that is consistent with our core values,” said Keith Myers, LHC Group chairman and CEO. “LHC Group looks forward to welcoming our new family members at Heart ’n Home Hospice as we join forces to help patients and families navigate the difficult times associated with end-of-life care.”
LHC Group expects to earn nearly $20 million in yearly revenue through these new assets. The deal is expected to close on July 1. The Heart ’n Home acquisition furthers the company’s strategy of building up their hospice footprint in markets where they already have a home health presence.
Idaho ranked 9th among the states for hospice utilization by Medicare decedents in 2018 at 53.9%, according to the National Hospice & Palliative Care Organizations. The national average that year was 50.7%. Oregon ranked 14th at 53.2%.
Out of LHC Group’s 120 hospice operations, 81 are co-located with home health, or 68%, up from 77 locations in 2020 and 63 in 2019. The company provides home health and hospice care in 35 states and the District of Columbia, serving roughly 60% of the nation’s 65 and older population.
Hospice acquisitions are a top strategic focus for LHC Group. Hospice deals accounted for 71% of the $502.5 million the company currently earmarked for its M&A pipeline, Myers indicated in an earnings call earlier this month. Last week, LHC Group purchased two locations from Tucson, Ariz.-based hospice provider Casa de la Luz. Financial terms of that transaction were not disclosed.
“We’ve intentionally executed on a hospice differentiation strategy for several years by putting in place the co-location strategy and making operational and leadership changes to improve the business,” said LHC Group President Joshua Proffitt in an earnings conference call. “This strategy created a solid foundation that we can now layer on additional growth and pursue new hospice opportunities as a major priority.”