Hospice and home health acquisitions are becoming a greater capital allocation priority for Aveanna Healthcare (Nasdaq: AVAH) as it integrates Family First Home Care and looks to reduce leverage while expanding its footprint.
A key component of Aveanna’s growth strategy is its acquisition program, with the company pointing to its June acquisition of Family First Home Care as an example of how it intends to expand its business while improving its balance sheet.
“We will continue to focus our efforts on five primary strategic initiatives,” CEO Jeff Shaner said during the company’s third quarter earnings call.
Those priorities include strengthening payer partnerships, improving clinical outcomes, implementing artificial intelligence and automation initiatives, and growing through acquisitions while improving net leverage and free cash flow.
Aveanna offers hospice and home health, private duty and medical solution services across 39 states. The company provides care to medically complex and chronically ill adult and pediatric patient populations.
The company delivered double-digit revenue and adjusted EBITDA growth in the third quarter of 2026, while signaling plans to pursue additional acquisitions in 2027, particularly in home health and hospice.
Aveanna reported revenue of $695.5 million for the three-month period ended Oct. 3, 2026, an 11.8% increase from $621.9 million in the prior-year quarter. Adjusted EBITDA rose 25% to $100.1 million, compared with $80.1 million a year earlier.
The company is also making progress on its recent acquisitions. Aveanna acquired Family First Home Care in June 2026. The company said integration efforts are progressing well, with essentially all back-office functions completed during the third quarter.
The remaining work is focused primarily on clinical operations, supporting branch locations and completing in-market and electronic medical record (EMR) integrations. Shaner expects the majority of integration efforts to be completed by the end of the fourth quarter.
He described the transaction as an example of the type of acquisition Aveanna intends to pursue going forward.
“I believe the Family First acquisition is a great example of how Aveanna will continue to grow inorganically and delever our balance sheet at the same time,” Shaner said. “I look forward to more Family First-type acquisitions in 2027.”
The comments suggest Aveanna is looking to balance acquisition-driven expansion with disciplined capital management, using transactions to build scale while improving net leverage and generating free cash flow.
Aveanna also indicated that its capital allocation strategy is shifting toward home health and hospice, with private duty services (PDS) acquisitions becoming more focused on smaller, targeted opportunities.
“We are shifting our capital towards home health and some hospice, and PDS will be more tuck-in related as we just start to pick off those six states that we want to be in,” Shaner said.
The company’s home health and hospice segment generated approximately $72.1 million in third-quarter revenue, a 15.6% increase from the prior-year period. The segment recorded 11,600 total admissions, up 19.6%.
Aveanna raised its full-year 2026 revenue expectations, now projecting revenue of more than $2.695 billion for the fiscal year ending Jan. 2, 2027, compared with its previous outlook of more than $2.68 billion.
Shaner identified the labor environment as the company’s most gusty headwind. He added that the industry does not have a demand problem, pointing to continued growth in demand for home- and community-based care.
“The labor environment represented the primary challenge that we needed to address to see Aveanna resume the growth trajectory that we believed our company could achieve,” he said.
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