Frisco-based home care services provider Addus HomeCare Corp. has agreed to buy the personal care operations of Atlanta-based Gentiva for $350 million.
Gentiva is a dedicated hospice, palliative, and personal care services company. The deal relates only to its personal care operations, which serve over 16,000 patients per day in a seven-state service area of Arizona, Arkansas, California, Missouri, North Carolina, Tennessee and Texas.
Founded in 1979, Addus HomeCare went public in 2009 and is listed on Nasdaq under the ticker ADUS. Its latest acquisition builds on record-breaking recent growth for Addus, which reported surpassing $1 billion in annual revenue for the first time in 2023.
Addus said it will fund the Gentiva operations acquisition via its existing revolving credit facility.
“We believe this acquisition is a great strategic fit for Addus, and we’re excited about the opportunity to expand our personal care market coverage in seven states, including Texas and Missouri, which are new markets for Addus,” Addus HomeCare Chairman and CEO Dirk Allison said in a statement. “Notably, Gentiva is the largest provider of personal care services in the state of Texas, where we currently have no personal care operations. This acquisition fits squarely into our growth strategy to leverage our strong personal care experience to build scale in existing markets as well as enter select new markets where we can immediately establish a significant presence.”
Acquisition ‘an important part of our growth strategy’
Allison said that Gentiva, founded in 1999, has an established reputation for quality, compassionate care, and that Addus would continue that “important work” through the company’s proven operating model.
He added that Addus was eager to work with the experienced operational leadership team and clinical staff in Gentiva’s personal care operations, “who share our mission to provide safe, cost-effective care in the preferred home setting.”
Allison also highlighted the financial aspects of the deal.
“The Gentiva personal care operations have annualized revenues of approximately $280 million, and we expect this transaction to be accretive to our financial results. Importantly, after funding this acquisition, Addus will still maintain a leverage ratio of less than three times, with the ability to quickly reduce our leverage through the additional expected cash flow,” the CEO said.
Gentiva CEO David Causby called the acquisition a good fit.
“A recognized leader in personal care services, Addus is the right home for our personal care division and our teammates who provide care to these important clients,” Causby said. “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.”
Allison added: “Acquisitions remain an important part of our growth strategy, and we will continue to pursue strategic acquisitions that meet our criteria and are accretive to our operations. Fortunately, our strong capital structure supports our strategy, and we look forward to additional opportunities ahead for Addus.”
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