The Pennant Group (NASDAQ: PNTG) acquired five Medicare hospice provider numbers during the past six months, which accelerated growth for its home-based care segment.
These deals expanded the home health, hospice and senior living company’s presence in California, Arizona, Oklahoma and Texas and include a mix of existing operations as well as license purchases.
“We continue to methodically and effectively execute on our acquisition strategy, as we acquired five hospice provider numbers in new markets close to our existing operations since our last earnings call … ” Pennant President and COO John Gochnour said in a Q3 earnings report. “These acquisitions expand our footprint in states where we’ve had significant success, particularly in more rural geographies. We are excited to serve these new communities and become the provider of choice.”
Among the deals was the purchase of Guardian Hospice and Guardian Hospice of Oklahoma for an undisclosed amount earlier this month. Guardian provides hospice care in 10 counties in southern Oklahoma and across six counties in northern Texas.
In September, The Pennant Group acquired Arizona-based Valor HospiceCare for a confidential sum. This followed Pennant’s purchase in June of Bluebird Home Health, Bluebird Hospice and Bluebird Home Care.
Idaho-headquartered The Pennant Group is a holding company of independent operating subsidiaries that provide home health, hospice and senior living services. The company operates 102 hospice and home health locations and 51 senior living communities in 13 states, including Texas and Oklahoma.
These transactions contributed to a 24.3% increase in hospice revenue during Q3, which reached $50.4 million. A nearly 18% rise in average daily census, for a total of 2,698, was another significant factor.
All told, the company’s home health and hospice segment brought in $101.5 million in Q3, up 18.3% year over year. Pennant attributed these gains largely to the growth in its hospice business, according to CEO Brent Guerisoli.
More transactions are likely on the way, Guerisoli indicated in the earnings call.
“We look at potential opportunities in the marketplace that meet our valuation criteria. Over the last decade, we have seen that our disciplined approach to pricing has created unique opportunities for local leaders to generate solid financial returns,” Guerisoli said. “Today, we are seeing more potential acquisitions that are consistent with our valuation expectations. This existing strong alignment between able and eager local leaders and compelling acquisitions and growth opportunities will be a powerful catalyst for future growth under our model.”