LHC Group (NASDAQ: LHCG) has completed its acquisition of South Carolina-headquartered Heart of Hospice from the family-owned investment firm Evening Post Industries (EPI) Group. The deal furthers a streak of hospice transaction by LHC Group that is unlikely to abate in the near term. Financial terms were undisclosed.
LHC Group’s M&A activity has hit an all-time high this year, with a heavy focus on hospice. The company has allocated $400 million for acquisitions during 2021, with 60% of the expected deals weighted toward hospice assets. This will likely continue in 2022.
Heart of Hospice will not rebrand following the acquisition. The hospice operates in Arkansas, Louisiana, Mississippi, Oklahoma and South Carolina. LHC Group expects to earn $92.5 million in annual revenue from the transaction, which will likely close during the third quarter of 2021.
“This is a tremendous achievement in our ongoing initiative to grow and expand our hospice services, as we welcome more than 750 Heart of Hospice employees, a combined 150 years in executive hospice leadership, and an outstanding reputation for quality and compliance to the LHC Group family,” said Keith Myers, LHC Group chairman and CEO.
The company is anticipating nearly $92.5 million in annual revenue through Heart of Hospice, which will not materially affect its 2021 diluted earnings per share.
Hospice expansion is a cornerstone of LHC Group’s growth strategy. Among the company’s goals is to increase the number of hospice locations in markets where they already have home health care operations.
Heart of Hospice last December launched two subsidiaries — Palliative Care at Heart and Supportive Care at Heart, organized under a new parent brand called Care at Heart.
The company also was quick to respond to the COVID-19 pandemic last year. Heart of Hospice established a new temporary inpatient unit in New Orleans for COVID patients with only eight days to plan and execute the program. The company received approval from the State of Louisiana to make that unit permanent last July.
Heart of Hospice CEO Carla Davis, will serve as president of LHC’s new Heart of Hospice division. Before taking the helm at Heart of Hospice, Davis was chief operating officer of VistaCare, and vice president of sales and marketing at Heartland Home Health Care and Hospice, a division of HCR ManorCare.
“Heart of Hospice will maintain the same excellent service and compassionate caregivers, and with the additional benefit of supportive infrastructure and health system and payor partnerships forged by LHC Group in the 27 years since its founding,” Davis said.
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