Durable medical equipment company Hospice Source has acquired Respiratory Therapy Home Care in Bellflower, Calif. This is the company’s 14th acquisition within the past five years. Financial terms were undisclosed.
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 operates 62 locations across multiple states.
“Hospice Source is committed to providing exceptional patient care to all its hospice partners,” Jeff West, CEO of Hospice Source, said. “The acquisition of RTHC allows us to extend that passion for service to a greater number of Southern California hospice patients and hospice partners. We welcome our new team members, hospice partners and patients to the Hospice Source family.”
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 form a company, 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 becoming more prevalent in the hospice market itself as well.
“We were attracted to RTHC for their reputation in Southern California. They care for their hospice partners, and patients, just as we aim to do everyday,” Clay Hooten, director of marketing and communications for Hospice Source told Hospice News. “That type of consistency is valuable for us.”
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.
“In contemplating the sale of our business after nearly 25 years, it was critically important that we found a buyer who has the same focus on excellent patient care,” Tim Hansen, President of RTHC said. “Jeff and his team at Hospice Source fit that description.”