Private equity firm Pharos Capital Group, L.L.C., has purchased Arizona-based THEMA Health Services, a hospice, home health and palliative care provider that serves more than 2,000 patients annually. Financial terms were undisclosed.
THEMA’s footprint includes a large swath of rural markets in central and northern Arizona, where patients and families often have limited access to hospice. The deal is the second transaction by Pharos Capital Partners IV, L.P., the firm’s most recently established flagship investment fund.
Pharos, which was founded by physicians, is focused on health care investments with the potential to improve outcomes, lower costs and expand access to care.
“As Medicare hospice daily per diem payments cost about four times less than daily skilled nursing facility services and 40 times less than acute-care inpatient services, THEMA’s hospice offering delivers significant institutional cost-saving benefits, while also maximizing quality of life with compassionate, accessible care,” Jim Phillips, partner at Pharos, said.
THEMA Founder and current CEO Theresa Lungwitz will retain a minority stake and serve as the executive chair.
Pharos has plans to expand THEMA via organic growth as well as targeted acquisitions. The firm has a track record of fostering hospice growth through its other platform Charter Health Care Group.
Charter has completed nine acquisitions during the past two years, and their growth activity is unlikely to slow down in the near term. The company had three deals come to fruition in August, including two providers in Texas, Genesis HospiceCare and Saints Hospice, for undisclosed sums.
Demographic tailwinds are strong in THEMA’s home state of Arizona. About 18% of the state’s population is 65 and older according to the U.S. Census Bureau. The Arizona Department of Health Services projects a 21% increase by 2050.
Arizona ranks third in the nation in hospice utilization. More than 58% of Medicare descendants in the state elected hospice during 2018, according to the National Hospice and Palliative Care Organization.
“I am pleased to bring in such an experienced, health care-focused partner to help THEMA reach new goals in the next phase of its growth, while being a thoughtful custodian of our history of quality care and compassion for the communities we serve,” Lungwitz said. “Pharos’s proven track record and significant resources will be invaluable as THEMA seeks to serve more communities as well as expand its hospice and post-acute care service offerings in rural markets.”
Companies featured in this article:
Charter Health Care Group, Pharos Capital Group, THEMA Health Services
