The Pennant Group (NYSE: PNTG) is in a period of expansion.
The home health and hospice provider has pursued a series of acquisitions and new partnerships that brought more than 6,000 new patients into their care, close to a 50% increase, according to CEO Brent Guerisoli.
These numbers do not include expected increases from the Pennant Group’s recent acquisition of Signature Healthcare at Home.
“Since the beginning of the year, we have entered into the Bon Secours Mercy Health (BSMH) home health joint venture, closed an additional two home health and two hospice transactions, initiated a management agreement with Hartford HealthCare, announced the largest acquisition in our history in Signature [Health at Home] and completed three senior living deals, two of which included the purchase of real estate assets,” Guerisoli said in an earnings call.
The Pennant Group agreed to acquire Signature Healthcare at Home’s hospice and home health assets for a price tag of $80 million. The transaction involves two separate purchase agreements, with one projected to complete by August 1 and the other by January 1, pending customary closing conditions and regulatory approval processes.
Pennant is the holding company for a cluster of independent hospice, home health and senior living providers located across 13 states.
The company in Q2 earned $168.7 million in total revenue, up 27.6% year-over-year. Its home health and hospice segment accounted for $125.3 million, representing a 31.9% increase from Q2 2023.
The Pennant Group’s hospice business brought in $59.3 million during the second quarter, up 27.5% from the prior year’s period. The growth was driven in part by double-digit growth in admissions and average daily census, with a 4.3% rise in length of stay.
Earlier this week, the company also increased its borrowing power by upsizing its revolver by $250 million, which Guerisoli called “dry powder for future growth.”
For now, the Pennant Group is focused on integrating its new Signature assets, post-closing. This includes installing new leadership teams and transitioning to a common EMR, among other changes.
“We’re really focused right now on integrating from a system standpoint and making sure that we have the right leaders in each seat on those first teams. That’s the bedrock, foundational thing that we’re looking at …” Guerisoli said. “That will be the big push during the first quarter of next year — to make sure that all of those agencies transition effectively and successfully to Homecare Homebase.”
