Minnesota-based St. Croix Hospice has been on a quest to conquer the Midwest through acquisitions and de novos.
The company today announced its purchase of Adaptive Hospice from Help at Home, which brings St. Croix three new locations and a foothold in Indiana — the 10th state in their footprint. The hospice provider is a portfolio company of the private equity firm H.I.G. Capital.
Help at Home, the seller in the Adaptive transaction, is backed by the investment firms The Vistria Group and Centerbridge Partners. The deal came at the right place at the right time for both parties, according to St. Croix Hospice President and CFO Stephen Phenneger.
“We have expressed interest in expanding into Indiana publicly and privately. We were contacted, along with other potential acquirers, by Help at Home as they were looking to divest of non-core hospice assets,” Phenneger told Hospice News in an email. “We were fortunate to be the party that Help at Home selected to be the future stewards of the business.”
Adaptive operates three locations in Indianapolis, Jeffersonville, and Newburgh, Indiana, bringing the total number of St. Croix Hospice branches to 60. St. Croix also has a presence in Illinois, Iowa, Kansas, Missouri, Nebraska, South Dakota, Wisconsin, and its home state of Minnesota. The company’s 1,470 employees care for more than 3,500 patients daily.
Demographics, hospice utilization rates, and geography were key considerations as St. Croix pursued the deal.
“In Indiana, we see a situation we see in most of our markets — underutilization of the hospice benefit. Indiana has been on our strategic roadmap as we look to continue to expand our upper Midwest presence and connects our Illinois and Michigan markets,” Phenneger said. “What we found in the Adaptive [Help at Home] team was one that shared our mission of care delivery and patient, family member and referral source engagement. We believe these particular markets of service are market types we know and will help be key anchors of our continued growth throughout the state and region.”
By 2030, one out of every five people living in Indiana will be older than 65, according to the Indiana Business Research Center. This represents 46% growth in the senior population since 2015.
Hospice utilization in Indiana reached 48.9% among Medicare decedents in 2018, according to the National Hospice and Palliative Care Organization. Utah had the highest rate among the U.S. states that year at 59.4%. The national utilization rate that year was 50%.
St. Croix Hospice’s growth is showing no signs of slowing down.
Last month the company acquired Michigan-based Corpore Sano Hospice, after purchasing Illinois-based Lexington Hospice Care earlier this summer. Financial terms for these transactions were undisclosed.
St. Croix has also launched five de novos so far in 2022, in Missouri, Nebraska, South Dakota, Minnesota, and Kansas.
“We found a culture in the team at Adaptive that was aligned with ours,” Phenneger told Hospice News. “That culture, coupled with our shared vision of patient care and the geographies served make us very bullish on the continued growth in these markets and our ability to bring hospice care to additional deserving patients and family members in communities where it is needed.”