Traditions Health LLC has purchased Wichita-based hospice and home health provider Serenity Health Management for an undisclosed amount, giving the company a larger foothold in Kansas.

While Traditions offers hospice in the Kansas City region, this transaction marks the entry of its home health business into the state.

Traditions Health is a portfolio company of the family-owned investment firm Dorilton Capital Advisors. Headquartered in College Station, Texas, Traditions provides hospice, home health care and consulting services to an estimated 5,000 patients in 17 states.

M&A firm Agenda Health advised Serenity on the deal.

“This was a great launching pad for [Traditions] because the seller was one of the leaders in the state growing very rapidly and owner-founded, which buyers tend to like,” Agenda Health CEO Al Veach told Hospice News. “This family-owned business hasn’t been changing hands. It was a good fit for Dorilton, the funding partner and Traditions, the flagship.” 

The fact that Serenity was home-grown and rooted in its community was also a point of value. The company was well-established in its market, according to Veach, giving it an edge among even its largest competitors in the state.

These factors also aided the provider with staff retention, which has become a key consideration in almost every hospice M&A deal at least since the onset of the pandemic. 

Favorable demographics were another draw to Kansas.

The proportion of the Kansas population older than 60 is growing. The U.S. Census Bureau estimates that nearly 25% of Kansas residents will exceed that age by 2030, a 32% increase from 2012.

Kansas was 12th in the nation in 2018 for hospice utilization among Medicare decedents at 53.3%, according to the National Hospice & Palliative Care Organization. This was slightly higher than that year’s national average 50.3%.

Traditions has been on a roll with hospice acquisitions. The company has completed more than a dozen transactions during the past three years.

It kicked off 2021 by acquiring four companies in January. Traditions in October of last year also acquired Family Comfort Hospice in Scottsdale, Arizona, the company’s fifth location in that state. Financial terms were undisclosed.

Most recently, the Texas-headquartered hospice provider completed a deal in Illinois in December, for Heritage Hospice.

Traditions’ entered the Kansas hospice market with the purchase of the Kansas City locations of Lumicare Hospice for an undisclosed sum. Lumicare operates in both the Kansas and Missouri sides of that metropolitan area.

Tradition’s continued growth is representative of the rising influence of private equity in the hospice M&A space.

And while 2021 was a record year for deal volume, several of the large strategic acquirers have said they plan to slow down on hospice deals in 2022 to pursue additional home health assets or to integrate companies they previously bought. 

The shifting of more health care towards the home is helping to shape the M&A market in addition to the traditional clinical considerations.

“I’m seeing a trend towards an interest in combination businesses, so that you get good value out of the purchase of the home health, but of course you get the feed that comes into the hospice,” Veach said. “All of these things drive referrals into these other segments. Building those ecosystems seems to be the focus, more so than any particular leg of that ecosystem.”