Post-acute care company AccentCare will merge with Rosemont, Ill.-based Seasons Hospice & Palliative Care. The combined company will provide a full continuum of home-based health care services, including hospice, palliative care, home health care and personal care.
AccentCare is a portfolio company of the private equity firm Advent International, which purchased the provider from Oak Hill Capital Partners in 2019 for an undisclosed sum. AccentCare CEO Steve Rodgers will lead the combined organization post-merger. Seasons CEO Todd Stern will helm the company’s hospice operations and will be named executive vice chair.
The merged organizations will become the fourth-largest hospice provider in the nation, according to Rodgers. Financial terms of the merger are being kept confidential.
“We had on-and-off conversations beginning late last year, and to the early part of this year. Bringing companies together is incredibly difficult,” Rodgers said. “[Seasons CEO Stern] and I got to know each other over the course of the year and developed a mutual respect for each other and our organizations. We started getting excited about what we could do together.”
Current Seasons locations will continue to work under their current brand, as will AccentCare’s home health and personal care operations. The companies’ have no immediate plans to rebrand.
After the merger is completed, the combined company will operate more than 225 locations in 26 states with close to 30,000 employees. It will have more than 60 health systems and physician practice joint ventures and partnerships and will care for in excess of 175,000 patients annually across all of its business lines.
“This is a marriage of opportunity. We see our footprints to be extremely complimentary, our respective skill sets to be extremely complimentary,” Stern said. “I believe that together, we can deliver a superior patient and family experience and ultimately serve our continuum of care partners even better, many of which want multiple service lines and multiple forms of care.”
Also included in the merger is Health Resources Solutions, a home health provider serving 2,500 patients in three states, as well as the personal care business Gareda, with more than 4,500 yearly clients. The merged company will be headquartered at AccentCare’s current home base in Dallas. Seasons’ Illinois headquarters will house the hospice division.
The merger is subject to regulatory approvals, which the companies expect to be completed by the end of the year. The integration process is underway. AccentCare’s private equity owner Advent International played a key role in moving the merger forward.
Many deals in the overall hospice M&A market were delayed early in the year due to the pandemic. The number of transactions has climbed during the third and fourth quarters, particularly among private equity buyers and sellers. The hospice market is one of the most robust in the health care services sector, despite record high multiples in the space.
Among the largest recent PE-backed acquisitions was the purchase of Queen City Hospice by Addus HomeCare Corporation (NASDAQ: ADUS) for a purchase price of $192.0 million. Queen City is a portfolio company of the private equity firm Stonehenge Partners. In October the PE firm the Vistria Group sold St. Croix Hospice to an affiliate of the investment company H.I.G. Capital for an undisclosed amount. PE-backed Charter Health Group, Traditions Healthcare and Three Oaks Hospice have also completed a series of transactions in recent months.
AccentCare itself entered into a joint venture with Fairview Health Services in September that will provide hospice care throughout Minnesota. AccentCare holds 80% ownership of the JV.
The M&A market for healthcare companies continues to strengthen in 2020 and as we approach 2021. There is unprecedented capital in market, the lowest interest rates in US history and strong acquirer motivations for high quality healthcare companies. Across the continuum of care, buyers and investors are looking for well established, profitable businesses and offering strong valuations and options for management.
Do you know the current market value of your business? We do! We are here to help you plan, prepare, explore and succeed in executing your strategic options.
Contact Paragon Ventures for more information.
www.paragonventures.com
800-719-1555
