As private equity interest in the hospice market continues to heat up, provider Choice Health at Home is leveraging its relationship with PE firm Coltala Holdings to pursue multi-state expansion. The company recently completed three acquisitions and expanded in Louisiana, Oklahoma and Texas as they work to extend their footprint across the South.

Fueling much of this growth is an influx of capital from Dallas-based Coltala, which recently acquired a stake in Choice for an undisclosed sum. The firm’s portfolio is oriented around health care, manufacturing and business services. The partnership with Choice provides a case study on how a private equity relationship can augment a hospice business as well as generating a return for the investor.

“[The Coltala relationship] was a great opportunity to take on private equity and grow through M&A more aggressively,” Choice Health at Home Founder and CEO David Jackson told Hospice News. “So much of our growth in hospice has been organic, because we provide the full continuum. But I anticipate that this infusion will help us accelerate what we’re doing on the acquisitions front.”

Jackson founded Tyler, Texas-based Choice in 2008 as a rehabilitation services provider. The company entered the home health space in 2012 and moved into hospice in 2018.

Choice vetted a number of potential private equity partners before moving forward with Coltala. Jackson told Hospice News that he felt Coltala’s leadership shared his organization’s values of creating a positive environment for employees, a focus on high-quality care delivery and a drive to grow the business. He also felt comfortable working with a firm that had familiarity with the Texas and Southwestern markets.

For Coltala, Choice represented an opportunity to invest in a provider that spanned the home-based care continuum in a time when demographic tailwinds and the COVID-19 pandemic were driving more patients to seek care in their residences. They also saw common ground with the Choice Health at Home management team.

“This continuum of care is something that is very important from a business model standpoint. This is where health care is going,” said Coltala CEO Ralph Manning. “The reality is the patient has a much better experience if they can go through a continuum with one company. [Jackson’s] personal story is a great example of dedication to mission. When he walked into our office, we saw that this is the type of person we want to partner with.” 

Jackson, a former college athlete and physical therapist, was inspired to establish Choice Health at Home by the experiences of his two grandfathers, both of whom struggled with debilitating, life-limiting illness in their twilight years.

When the family saw complications with the home health care these patriarchs received, as well as a difficult transition to hospice, Jackson said he wanted to create a company that would provide a better patient experience. He capitalized Choice with personal funds and three credit cards.

“Watching my two grandfather’s go through that and understanding my family’s difficulties with it, I didn’t want this to happen to someone else,” Jackson said.

These days, Choice’s more than 800 clinician employees provide care out of 40 locations in Texas, Louisiana and Oklahoma. The company recently entered the Oklahoma market with the purchase of Angelic Hospice. It also bolstered its home health business with the acquisitions of Restore Home Health, also in Oklahoma, and Texas-based Home Therapy of Austin. Financial terms of these transactions are confidential.

With Coltala’s backing, Choice intends to keep that momentum going. The company has a number of transactions in its pipeline. They are investigating potential transactions in Texas, Oklahoma, New Mexico, Arizona, Colorado, Arkansas and Louisiana, according to Jackson.

“Our experiences have led us to invest in teams that have a real vision that can drive performance, beyond just the desire for profit,” said Edward Crawford, president of Coltala. “The balance of mission and margin is what we seek. As we look at opportunities to invest with teams, it’s important that we not only make a profit, but also an impact.”