The Pennant Group (Nasdaq: PNTG) is poised for more acquisitions as the year progresses, supported by a pipeline of newly trained leaders for acquired assets.

Pennant’s revenue growth has positioned the company well for more deals. During the fourth quarter the company accumulated $20.6 million in net cash generated from operating activities and $17.2 million in free cash flow.

When considering transactions, the company seeks out often struggling companies in its existing or expanded markets that earn between $3 million and $10 million in revenue and sell at a multiple of 5x to 8x for hospice companies.

“We have such a revolver, up to $250 million in the middle of last year, and we did an equity offering. As we closed out the year, we essentially had full access to the entire revolver and ample dry powder as we continue to grow,” CEO Brent Guerisoli said in a presentation at the Oppenheimer investor’s conference. “Not only that, but we actually performed some really significant acquisitions in 2024.”

Among those 2024 deals was The Pennant Group’s acquisition of Signature Healthcare at Home’s hospice and home health assets for a price tag of $80 million which closed in January. The company also completed some senior living transactions.

Pennant is the holding company for a cluster of independent hospice, home health and senior living providers located across 13 states. Year to date, the company has added more than 60 CEOs to its portfolio agencies as well as 40 internal clinical leaders.

The company’s consolidated revenue for the third quarter reached $180.7 million, up 28.9% from the previous year’s quarter. The home health and hospice segment accounted for $135.7 million, representing a 33.7% increase over Q3 2023. Hospice average daily census grew to 3,444, a 27.7% jump year-over-year.

The company’s total revenue for the full year 2024 reached $695 million, up 27.6% from 2023. During the fourth quarter alone, Pennant earned $188.9 million in total revenue, close to a 30% increase year-over-year.

Pennant’s Home Health and Hospice Services segment revenue for the year was $519.5 million, an increase of $125.0 million or 31.7% over 2023. For Q4 2024, the segment earned $142.0 million, an increase of $35.1 million or 32.9% over the prior year’s quarter.

As it pursues deals, the company has encountered less competition for assets that it has in the past.

“In the last couple years, there’s been a lot less competition of interest as interest rates have affected private equity. I also think there’s a regulatory component affecting private equity,” Guerisoli said. “More states have introduced legislation that makes it harder for private equity deals to go through and imposes a review process where private equity is usually frowned upon, which does position us well to be competitive, because we are long term holders with a good track record, positive quality scores, and so we stand out in those processes.”