Addus HomeCare Corp. (NASDAQ: ADUS), a Frisco-based provider of home care services, has agreed to sell its New York operations to HCS-Girling, a Brooklyn, New York-based provider of home health and home care services for as much as $23 million.
Addus, which is headquartered on Cowboys Way in Frisco, said the operations being sold consist of all of its personal care operations in the state of New York, including fiscal intermediary services under the New York Consumer Directed Personal Assistance Program.
“We are pleased to reach this agreement with HCS-Girling to divest our New York personal care operations and exit the state. This has been a challenging market for Addus and no longer fits our growth strategy,” Dirk Allison, Addus chairman and CEO, said in a statement. “We do not have the opportunity to offer all three levels of home care services there, and the well-documented program challenges and start-and-stop changes in the state’s approach have consumed a disproportionate amount of management resources for limited financial contribution.”
Allison said company leaders expect that exiting the New York market “will be immaterial to our consolidated earnings and will lead to a modest expansion in our margin profile.”
He added, “We believe we can have a greater impact for both our clients and our shareholders by focusing on and growing other more strategic markets. HCS-Girling has a solid reputation for personalized, professional care for customers in their own homes, and we are confident that our customers in the New York market area will continue to receive excellent care.”
Addus said the purchase price will be up to $23 million, depending, in part, on future operating requirements for HCS-Girling in New York. It will use the proceeds from the transaction to reduce the outstanding balance on its revolving credit facility.
“We look forward to the opportunity to expand our personal care service coverage in the New York market. Addus and HCS-Girling have a shared commitment to provide safe, quality care to more customers in the preferred home setting, and we will build upon the excellent reputation that Addus has already established in our market. We welcome the dedicated Addus employees and caregivers to the HCS-Girling team as we bring together our shared expertise and experience and extend our market reach,” Agnes Shemia, co-founder and co-CEO of HCS-Girling, said in a statement.
According to the company’s 2023 results, Addus HomeCare reported record annual revenues of $1.06 billion, an 11.3% increase from the previous year. Addus was No. 62 on the Dallas Business Journal’s recent list of public companies in North Texas, ranked by companywide revenue. The company has seen consistent year-over-year revenue growth for over a decade, with revenues increasing from $194.57 million in 2007 to over $1 billion in 2023, per StockAnalysis.
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