Illinois-headquartered Unity Hospice & Palliative Care has expanded to Houston, Texas, following its acquisition of an existing license in that market.
Unity is a family-owned provider established in 1992 that since then has cared for more than 30,000 patients, the company reported. This transaction marks the company’s first entry into Texas. Unity also has locations in Missouri, Indiana and its home state of Illinois.
“This expansion coincides with Unity’s 30th anniversary as a premier hospice and palliative care organization,” Unity owner Michael Klein told Hospice News in an email. “As the Unity family of programs has grown, we’ve successfully maintained our independence as a multi-generational, family-owned organization.”
The new Houston office, which is up and running, provides care in 13 Texas counties.
Agenda Health, an Austin, Texas-based M&A advisory firm, facilitated the transaction for the license.
Acquiring a license generally requires less capital than purchasing an entrenched asset already in operation. License transactions are often favorable for smaller organizations that seek to expand, but may struggle to outbid a large strategic buyer or private equity firm.
“The economic benefit for acquiring a license or small agency from the buyer’s perspective can be significant when compared to the premium that is present on mature agencies, which we feel will stimulate steady interest from buyers as the hospice market continues to trade at high premiums,” Alex Veach, director of operations for Agenda Health told Hospice News in a separate email.
Texas markets like Houston are primed for hospice growth. More than 143,000 patients received hospice care in the Lone Star State in 2021, according to the U.S. Centers for Medicare & Medicaid Services (CMS). Only California and Florida had more patients who enrolled in the benefit that year.
Favorable demographics are driving demand for hospice in Texas. Seniors are expected to comprise more than 20% of the state’s population by 2030, up from 12.9% currently, projections by the U.S. Census Bureau indicate.
“As one of the largest cities in the United States, Houston is a key market for hospice consolidators looking to operate in Texas,” Veach said. “We’ve seen strong historical interest here in our own transactions and anticipate that continuing in 2023 as buyers continue to develop their platforms and acquire new ones.”