Addus HomeCare Corporation (NASDAQ: ADUS) has entered into a definitive agreement to acquire Gentiva’s personal care business for about $350 million.

Gentiva’s personal care segment brings in annual revenues of close to $280.0 million. Post-transaction, Addus will continue with a leverage ratio of less than 3x, with the ability to further that amount with the influx of revenue resulting from this deal, Addus Chairman and CEO Dirk Allision said in a statement.

“We believe this acquisition is a great strategic fit for Addus, and we are excited about the opportunity to expand our personal care market coverage in seven states, including Texas and Missouri, which are new markets for Addus,” Allison said. “Notably, Gentiva is the largest provider of personal care services in the state of Texas, where we currently have no personal care operations. This acquisition fits squarely into our growth strategy to leverage our strong personal care experience to build scale in existing markets as well as enter select new markets where we can immediately establish a significant presence.”

Gentiva is a portfolio company of the private equity firm Clayton, Dubilier & Rice (CDR). The Atlanta-based provider emerged from the former hospice and personal care segments of Kindred at Home. CDR in 2022 purchased a 60% stake from the insurance mammoth Humana Inc. (NYSE: HUM) for $2.8 billion.

The company currently serves more than 16,000 patients daily in Arizona, Arkansas, California, Missouri, North Carolina, Tennessee and Texas. The sale to Addus expected to close following customary regulatory approvals.

“A recognized leader in personal care services, Addus is the right home for our personal care division and our teammates who provide care to these important clients,” Gentiva CEO David Causby said in a statement. “This will ensure continued growth for that segment under proven leadership and will allow us to sharpen our focus on our industry-leading core hospice and palliative businesses, where we have the greatest opportunity to deliver the compassionate care that defines who we are, to those who need us the most.”

Addus is poised for further acquisitions, potentially including some hospice deals, company executives have indicated in earnings calls. The company is seeking to pair its clinical services with its personal business in its existing markets. This is a cornerstone of its acquisition strategy, though the company does not rule out the possibility of moving into new markets if circumstances are right.

The growth spurred by the Gentiva transaction should provide a boost to Addus’ stock, according to Brian Tanquilut, equity analyst for the investment banking firm Jefferies Financial Group.

“We have always appreciated [Addus’] consistent organic growth performance, while also noting our belief that meaningful stock upside hinges on a resurgence of M&A activity that translates to a boost in the company’s overall EBITDA growth,” Tanquilut indicated in a research note. “Recall that [Addus] historically traded at higher multiples when the company’s growth rate was notably higher, driven by boosts from M&A, so as management gets back more aggressively to the acquisition game, we expect to see some multiple expansion.”