Addus To Build Out Care Continuum Via Hospice, Home Health M&A

This will be another active year for acquisitions at Addus HomeCare Corp (NASDAQ: ADUS), as the company seeks to build out its care continuum from personal care to home health and hospice.

A goal for Addus is greater coordination between its three business lines to allow for timely and smooth transitions of care, according to Addus President and Chief Operating Officer Brad Bickham, speaking at the virtual Oppenheimer 32nd Annual Healthcare Conference.

The company’s New Mexico operations are an exemplar of that model.


“In New Mexico, we have a nice steady stream of monthly referrals coming from home health to hospice,” said Bickham. “We’re looking to expand that capability more from personal care to home health, and personal care to hospice. Right now, it’s a little bit of a manual process and it’s a lot of communication between the three service lines.”

New Mexico and Illinois are two of the three states in which Addus offers a trifecta of personal, home health and hospice care. Addus last year 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.

Addus’ hospice business in Illinois will pick up steam from the company’s recent $85 million purchase of Illinois-based JourneyCare, one of the largest hospice providers in the Prairie State, serving 750 patients daily in 13 counties.


Texas-based Addus provides personal care to upwards of 42,000 patients across 22 states and roughly 210 locations. The company also provides home health and hospice services to more than 3,600 patients.

Since 2019, the company has purchased seven personal care companies and four home health and hospice companies. The strategy of co-locating all three pillars of its business in the same markets will continue in 2022.

Many expect 2022 to bring some degree of normalization in regards to COVID-19. As its attention starts to shift, the company is now looking to boost its home health presence in Ohio, according to Brian Poff, Addus executive vice president and CFO.

“We still are very active and expect to see opportunities to continue to be active in M&A, and we are very well capitalized to do so,” said Poff during the conference. “Not only in continuing to bolster our personal care operations in markets that we could use additional geographic coverage, but also adding clinical services in markets that we think we have a good strong personal care presence in today.”

However, Addus faces labor headwinds that so far have weighed down the company’s profit margin, including acquired revenue from the JourneyCare deal. Industry-wide staff shortages, rising turnover and burnout rates have come with wage increases as demand for clinicians outstrips the supply.

Clinicians providing all three of Addus’ core services lines have seen wage hikes as high as 5% at the close of 2021, Chairman and CEO Dirk Allison said during the company’s Q4 earnings call.

Addus has “bolstered” its recruiting efforts in both home health and hospice areas in 2022, looking to pick up the hiring pace as the year continues, Bickham stated. These efforts have helped relieve some of the pressure in the early weeks of the year.

“Pre-pandemic, hiring was challenging on the personal care side,” said Bickham. “The clinical side has been the more challenging hiring environment, but we’ve seen some recent improvement over the last couple weeks. We are starting to see a sliver of improvement, but that still is an area that has had some struggles.”

Companies featured in this article:

, , , ,