Traditions Health Expands Reach with Acquisitions in 3 States

Traditions Health LLC has grown its reach with the acquisition of five hospice entities in California and Nevada. The move strategically expands its presence into those states, according to a recent announcement from the company.

Traditions on Wednesday announced acquiring San Diego-based Sonata Hospice, as well as Cadence Hospice, Pacific Crest Hospice and Sonata Hospice of Riverside County, all in California. The company also stepped into the Nevada market with the purchase of Sonata Hospice of Las Vegas.

All of the entities were previously supported by Pursue Health LLC. Stoneridge Partners served as the exclusive advisor in the deals.

These deals follow the acquisition of Kansas-based Serenity Health Management earlier this week. Purchasing the hospice and home health provider not only grew Tradition’s foothold in the state, but also established its first home health presence there. M&A firm Agenda Health was the advisor in that transaction.

These six acquisitions build upon Tradition’s strategic pipeline, according to President and CEO David Klementz.

“These strategic acquisitions help to strengthen our existing commitment in California and Kansas, and establish a new Traditions Health presence in Nevada,” said Klementz in an announcement. “I am thrilled to welcome these new patients and employees to the Traditions Health family.”

Texas-headquartered Traditions provides hospice, home health and palliative care as well as consulting services to upwards of 8,500 patients across 18 states.

Hospice utilization runs high in each of the three states of the newly acquired hospice and home health entities. Kansas ranked 12th in the nation in 2018 for hospice utilization among Medicare decedents at 53.3%, according to the National Hospice and Palliative Care Organization (NHPCO).

California reached a rate of 45.2%, while Nevada hovered at 47.1%, each falling just under the national average of 50.3% that year, NHPCO reported.

Demographics are swinging up demand for hospice care nationwide. The U.S. Census Bureau projects that by 2060 nearly a quarter of Americans will be 65 or older, tipping above 94 million adults nationwide. This is a jump from 15%, or just under 50 million, in 2016.

Tradition’s acquisition activity has swelled, with the company completing more than a dozen transactions during the last three years. Last year alone began with a bang through the purchase of four companies in January, Arizona-based Family Comfort Hospice in October and Illinois-based Heritage Hospice in December. Financial terms of these deals were undisclosed. 

The company’s expansion represents a rising tide of private equity in the hospice M&A market. Traditions Health is a portfolio company of the family-owned investment firm Dorilton Capital Advisors. The two formed a partnership that has been “instrumental in developing and growing Traditions’ health care footprint” from a single location to more than 75 office locations, according to the company.