Addus HomeCare Corporation (Nasdaq: ADUS) has closed its $350 million acquisition of Gentiva’s personal care business.

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 are excited to add the personal care operations of Gentiva, which will significantly expand our market coverage in seven states, including the new markets of Texas and Missouri. Notably, we will now be the largest provider of personal care services in the state of Texas,” Allison said. “We welcome Gentiva’s experienced personal care, operational leadership and caregivers to the Addus family.”

Addus funded the acquisition through a combination of cash on hand representing a portion of the proceeds of the company’s recent public offering of common stock and its existing revolving credit facility.

Addus provides personal care, home health and hospice to more than 48,500 patients across 22 states. Its total revenue reached $289.8 million in the Q3 of 2024, a 7% year-over-year increase. Its personal care revenues reached $215.4 million that period.

The company’s hospice service line brought in $57.3 million in revenue during the third quarter, a 3.5% rise from $53.1 million in the prior year’s period. The company reported a “modest increase” in its hospice average daily census, which reached 3,534 in Q3, driven in part by 2.1% in organic growth. Hospice average length of stay reached 96.3 days during this period.

Addus is poised for further acquisitions, company executives have indicated in earnings calls. The home-based care provider is seeking to pair its clinical services with its personal care 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.

However, valuations in the hospice space have led Addus to take a more conservative approach to hospice transactions as it actively seeks home health and personal care deals.

Hospice multiples reach record highs in 2020 and 2021, as much as 26x. Since then the price tags have reportedly come down, but they haven’t gone far enough, Addus President and COO Brad Bickham said during the Stephens Annual Investment Conference. The company also seeks to bulk up its home health business relative to the scale of its hospice operations.

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.

“This important acquisition aligns with our strategy to build scale in existing markets as well as enter select new markets where we can immediately establish a significant personal care presence,” Allison said. “Importantly, we also expect this transaction to be accretive to our financial results, adding annualized revenues of approximately $280 million. Going forward, we will continue to pursue additional acquisitions that meet our criteria and complement our organic growth initiatives. We have the capital structure and financial flexibility to support our growth strategy in 2025 and beyond.”