Texas-based Choice Health at Home LLC has inked a deal to acquire Lumicare Hospice, growing its presence in two current markets while establishing services in a new state. Financial terms of the deal were not disclosed.
Lumicare Hospice has locations in Texas and Arizona, two states in Choice’s existing service region. The hospice also has operations in Colorado – a new state in Choice’s geographic pipeline.
“Lumicare Hospice aligns perfectly with our mission to improve the lives of individuals and families facing serious illness,” Trina Lanier, Choice’s chief growth officer, said in a statement. “We are thrilled to be providing services in Colorado and excited to expand on our current footprint in Texas and Arizona.”
Lumicare Hospice received its Medicare certification in 2020, according to National Hospice Locator data. The hospice provider serves predominantly urban populations in Houston, Phoenix and Denver.
Post-acquisition, Kevin Peay, a founder of Lumicare Hospice, will serve as president of operations of its Colorado location.
Similar to national trends, demand for hospice is growing in Colorado, fueled by demographics. Hospice utilization in the state reached 50.4% among Medicare decedents in 2020, the National Hospice and Palliative Care Organization (NHPCO) reported. This falls slightly above the average rate of 47.8% nationwide that year.
Seniors 65 and older represent 15.7% of Colorado’s overall population, according to the U.S. Census Bureau. Nearly 1 in 5 residents in the state are projected to fall into this age group by 2050, the Colorado Gerontology Society reported.
“At Choice, the mission is to enhance the life of every person we serve through the pursuit of excellent care. This aligns so well with the services and mindset of Lumicare,” Peay said. “I am looking forward to continued growth and expansion throughout the Choice footprint with this goal in mind.”
Established in 2008, Choice offers home health, hospice, private duty and skilled nursing rehabilitation services, operating in 60 locations across Arizona, Kansas, Louisiana, Nevada, Oklahoma and Texas. The company is backed by the private equity firms Coltala Holdings and Trive Capital Management.
Last year, Choice secured a $190 million credit facility led by Oxford Finance, a global specialty financial firm focused on life sciences and health care investments. In conjunction with this infusion of capital, Choice has since purchased Kindful Hospice and Amed Home for undisclosed sums.
Purchasing Lumicare marks a “significant expansion” of Choice’s footprint in the southwestern region, the company indicated in the statement.
Choice’s leaders have reiterated a commitment to “targeted” geographical growth in its strategic plans to provide a more “comprehensive solution for post-acute care at home,” the company indicated.
Hospice plays a crucial role in the company’s future growth, according to David Jackson, founder and CEO of Choice Health at Home.
“As a clinician lead business we know hospice is such an important mission and service for our patients,” Jackson said. “Lumicare has built a reputation of providing outstanding care. We are so excited to welcome the employees and patients to Choice Health at Home.”
Choice’s acquisition bucks a recent trend in hospice: unseasonably low transaction volume.
In the third quarter of 2023, there were just two hospice-related acquisitions, according to data from M&A advisory firm Mertz Taggart. In comparison, the previous year’s third quarter saw at least 12 hospice-related deals.
“There just are not a lot of squeaky-clean, profitable hospices going to market,” Cory Mertz, managing partner of Mertz Taggart, said in a quarterly report from the firm. “Those that do will still attract strong attention. Buyers have gotten much more disciplined, and the increased regulatory scrutiny is causing more deals to fail diligence. For a hospice agency to transact today, it really needs to be buttoned up, especially on the clinical and compliance fronts.”