BrightSpring Health Services (NASDAQ: BTSG) has penned a definitive agreement to acquire the assets of Haven Hospice in a $60 million deal.

The transaction includes the purchase  of two brands, North Central Florida Hospice Inc. and Haven Medical Group LLC. The nonprofit holds hospice certificates of need (CON) for hospice care in 18 Florida counties. 

“We are excited to welcome Haven Hospice into BrightSpring, bolstering our existing hospice care line of business and expanding our hospice services into the CON state of Florida,” said BrightSpring’s President and CEO Jon Rousseau in a statement. “The delivery of compassionate hospice care is critical for patients and their families, and we’re committed to delivering that to high-need Floridians. It is extremely difficult to enter the Florida hospice market, and with this recent expansion of services, we can now provide high-quality care to more patients and their families during the most difficult time in their lives.”

Post-transaction BrightSping will provide hospice, palliative care and advance care planning services throughout the Haven service region. The $60 million transaction includes $15 million in cash at close, $30 million in company equity at close and an additional $15 million in a seller note payable four years after closing.

BrightSpring went public in January with a successful initial public offering (IPO). BrightSpring is a home- and community-based health care services platform that serves more than 400,000 patients daily. The company indicated its intent to go public in a Jan. 3 filing with the U.S. Securities and Exchange Commission, with a $1 billion IPO.

During the first quarter of the year, BrightSpring saw net revenue rise 27% year-over-year to $2.5 billion. The Louisville, Kentucky-based provider achieved a gross profit of $369 million, up 10.4% compared to $335 million in Q1 2023, but experienced a net loss of $46 million, up from a $22 million loss in the first quarter of 2023.

The company’s health care provider services segment, which includes its hospice business, as well as home health and other services, accounted for $600 million in Q1 revenue, up 7% from $561 million year-over-year.

The transaction is a signal that BrightSpring is well-positioned to execute its growth strategy, according to Brian Tanquilut, equity analyst for the investment banking firm Jefferies Financial Group.

“We view the Haven acquisition as further validation of BTSG’s M&A growth story and see the acquisition as a notable positive, as it allows the company to grow its footprint in a state where hospice expansion is notably difficult given CON laws,” Tanquilut indicated in a research note. “Looking ahead, we expect BTSG to apply its operating playbook within Haven, which should translate to growth acceleration and drive synergies that would enable [mangement] to bring its effective acquisition multiple down to its historical average of ~4x EBITDA, which underscores their ability to complete highly accretive acquisitions.”

However, other stakeholders in the hospice community expressed dismay over the publicly traded company’s takeover of a nonprofit, including the National Partnership for Healthcare and Hospice Innovation (NPHI).

“NPHI firmly believes that not-for-profit, community-based end-of-life care providers deliver the highest-quality care in the nation. These organizations put people over profits by providing the full complement of care for those in declining health,” NPHI CEO Tom Koutsoumpas said in a statement emailed to Hospice News. “It is therefore a troubling trend to observe not-for-profit hospices being acquired by for-profit entities, as ample data shows this often leads to lower patient satisfaction and a shift in focus from patient care to profits.” 

The transaction is the latest in a series of for-profit acquisitions of Florida nonprofits during the past several years, according to Phillip Ward, CEO of Community Hospice and Palliative Care, an affiliate of Alivia Care. Community and Haven both launched in 1979 and have overlapping footprints in some counties.

“You just begin to see a loss of what I believe is a part of hospice history and organizations that were very much focused on charity care, community benefits and being a part of the community,” Ward told Hospice News “So it is a part of a larger trend that is impacting North Florida pretty dramatically right now.”