Addus HomeCare to Acquire Gentiva’s Personal Care Business for $350 Mn in Expansion Move

The acquisition will extend Addus' personal care market coverage to seven states, including Texas and Missouri, new markets for the company.

Eyeing expansion, the US-based Addus HomeCare has set foot to acquire Gentiva’s personal care business for $350 million. 

The acquisition will extend Addus' personal care market coverage to seven states, including Texas and Missouri, new markets for the company.

Gentiva, headquartered in Atlanta, provides hospice, palliative, and personal care services through over 590 locations in 38 states. It serves 16,000 patients daily in states such as Arizona, Arkansas, California, Missouri, North Carolina, Tennessee, and Texas.

Market Expansion Plans

Frisco, Texas-based Addus expects to finalize the acquisition after regulatory approvals and standard closing conditions. The company will fund the purchase using its existing revolving credit facility. 

Sharing thoughts, Dirk Allison, chairman and CEO at Addus, said, "We believe this acquisition is a great strategic fit for Addus. This acquisition fits squarely into our growth strategy to leverage our strong personal care experience to build scale in existing markets and enter select new markets where we can immediately establish a significant presence."

The acquisition will notably extend Addus' market reach into Texas, where Gentiva is the largest provider of personal care services, and Missouri, both new territories for Addus.

Financial Impact & Operational Goals

Reportedly, Gentiva's personal care operations have annual revenues of approximately $280 million. 

Allison noted the deal's financial benefits, stating, "We expect this transaction to be accretive to our financial results. Importantly, after funding this acquisition, Addus will maintain a leverage ratio of less than three times, with the ability to quickly reduce our leverage through the additional expected cash flow."

Addus currently provides home care services to over 49,000 consumers through 214 locations across 22 states, primarily focusing on personal care, hospice, and home health services.

Focus on Growth through Acquisitions

Allison emphasized that acquisitions are a crucial part of Addus' growth strategy. He stated that the company will continue to seek strategic acquisitions that align with their criteria and enhance their operations. 

He also mentioned that Addus' strong capital structure supports this strategy, and they look forward to future opportunities.

Echoing the same sentiments, David Causby, CEO of Gentiva, said, "Addus is the right home for our personal care division. This will ensure continued growth for that segment under proven leadership and will allow us to sharpen our focus on our industry-leading core hospice and palliative businesses, where we have the greatest opportunity to deliver the compassionate care that defines who we are to those who need us the most."

Market Activity & Previous Transactions

This acquisition follows Addus’ recent announcement to sell its New York personal care business and fiscal intermediary services for the state’s consumer-directed care program to HCS-Girling, another home-based care provider.

The home care sector has seen substantial M&A activity recently. In March, Advocate Health sold its senior home care business, Senior Helpers, to private equity firm Waud Capital Partners. Senior Helpers operates over 380 franchised and owned locations across 44 states, Canada, and Australia.

Additionally, a year ago, UnitedHealth Group announced its $3.3 billion acquisition of home health provider Amedisys, outbidding competitor Option Care Health. This deal is currently under review by the Department of Justice and Oregon regulators.