Enhabit, Inc. (NYSE: EHAB) has acquired Southwest Florida Home Care, Inc.’s home health agency in Fort Myers for an undisclosed sum.
The transaction expands Enhabit’s home health footprint in Florida to 22 locations.
Acquisitions have been on the menu since day one for Enhabit, which spun off from Encompass Health (NYSE: EHC) in July. The close of Q3 marked the company’s first quarter as a separate entity.
Enhabit’s deal pipeline continues to be “robust,” executives have indicated in earnings calls.
“We are prioritizing opportunities that offer the greatest growth opportunity for our business. When we look at these opportunities, we’re looking at Medicare beneficiaries in the market, opportunities for scale and density in that market, and overlap with existing service lines,” CFO Chrissy Carlisle said. “And now especially, we’ve added staff availability when we’re looking at markets. That’s a critical success factor.”
The company plans to deploy $50 million to $100 million annually, with about 60% to 70% weighted toward hospice, CEO Barbara Jacobsmeyer previously told Hospice News.
Recent transactions include the purchase of Caring Hearts Hospice in Texas and the Nov. acquisition of Arizona-based Unity Hospice. Financial terms for both deals were undisclosed.
Complementing their acquisition strategy is a plan to open 10 home health and hospice de novos each year, initially with a heavy focus on hospice, Jacobsmeyer has indicated.
Enhabit has launched three new locations so far this year and plans to open three to four additional sites during the fourth quarter, though thus far progress has been slower than anticipated.
“We are experiencing delays with local licensing agencies and timing of local patient surveys,” Jacobsmeyer said in an earnings call. “These delays are beyond our control and are impacting the timeliness in which we can open these new locations.”
Enhabit’s roughly 11,000 employees provide care across 34 states nationwide. More than 100 of its roughly 250 locations offer hospice in 22 of those states.
The company in 2022 has struggled with labor headwinds and associated constraints on clinical capacity. Enhabit also experienced instances of lower reimbursement for its home health services due to the shift of more patients towards Medicare Advantage.
The company’s consolidated net service revenue dropped 3% from Q3 2021 to $265.7 million. Enhabit’s hospice segment brought in $49.4 million in the third quarter, down 6.4% from $52.8 million during the prior year’s period.