Addus Completes $85 Million JourneyCare Transaction

Addus HomeCare (NASDAQ: ADUS) has completed its $85 million acquisition of Illinois-based nonprofit hospice provider JourneyCare Inc. As a result of the deal JourneyCare has transitioned to for-profit status.

Addus financed the deal, via cash on hand and the company’s revolving credit facility. The company in 2021 opened a $600 million revolving line of credit with Capital One Financial Corp. (NYSE: COF) as the lead arranger and administrative agent.

“Completing the purchase of JourneyCare’s hospice operations is an exciting step for Addus. JourneyCare is a leading provider of hospice care with a long history of serving the greater Chicago area,” said Addus Chairman and CEO Dirk Allison. “We already have a strong market presence in Illinois, and this acquisition enables us to provide all three levels of home care in Illinois, consistent with our broader growth strategy.”

Addus plans to weight its M&A strategy towards personal care and home health during 2022 but will continue to consider hospice transactions. The company seeks to build hospice density in markets where they have a home health or personal care presence. Among these markets is the Chicago metropolitan area, where JourneyCare is headquartered. Last fall, Addus completed its acquisition of Summit Home Health, also near Chicago.

Addus provides hospice, home health and personal care services to nearly 44,000 patients through 215 locations in 25 states. The company’s net service revenues rose 11.7% to $216.7 million in the third quarter of 2021, up from $194.0 million for the prior year’s period.

The company completed seven personal care acquisitions and four home health and hospice deals since 2019. Most recently, Addus acquired Armada Hospice of New Mexico and Armada Hospice of Santa Fe for $29 million. The transaction also included the affiliated Armada Skilled Home Health of New Mexico.

Hospice utilization in JourneyCare’s home state of Illinois market reached 50.3% among Medicare decedents during 2018, which is in line with the national average, according to the National Hospice & Palliative Care Organization. Utah led the nation with 60.5%.

“Looking ahead in 2022, Addus will continue its strategic focus on acquisitions that meet our strategic criteria and complement our strong organic growth opportunities,” Allison said. “We continue to have a solid pipeline of potential acquisitions and the financial flexibility to support our growth and further enhance our competitive position.”