Home Health & Hospice Week

Despite uncertain Medicare reimbursement and other pitfalls, there have been some blockbuster prices paid for home care providers in the past decade.

More than $7.5 billion funded 459 publicly announced mergers and acquisitions in the home care market from 2000 through the end of 2009, says M&A analysts Irving Levin Associates.

The largest deals were in the home medical equipment sector, with The Blackstone Group buying Apria Healthcare Group for nearly $1.6 billion in 2008 and Walgreen Co. buying Option Care Inc. for $850,000 in 2007, Irving Levin notes in a release.

While no other home health agency or hospice deal has reached the $1 billion mark being set by the Gentiva Health Services-Odyssey HealthCare Inc. acquisition (see related story, this page), other big HHA and hospice deals include:

• Gentiva buying The Healthfield Group for $454 million in 2006;

• Roto Rooter buying VITAS Healthcare Group for $406 million in 2003;

• Amedisys Inc. buying TLC Healthcare Services for $396 million in 2008;

• Amedisys buying Housecall Medical Resources for $108.6 million in 2004.

The Gentiva acquisitions of Odyssey and Healthfield are "atypical blockbusters" for the industry,observes Jack Eskenazi Jr. with mergers and acquisitions firm Healthcare Advisory Partners in Los Angeles. Big deals for this sector usually run in the tens of millions, not hundreds of millions of dollars.

Examples of more typical big transactions include ResCare Inc.'s home care subsidiary Southern Home Care Services Inc. buying 18-state Kelly Home Care Services Inc. for $12.5 million in 2007 or AccentCare Home Health Inc.'s purchase of SunPlus Home Health Services Inc. for $19.5 million in 2006, Eskenazi notes.

From 2000 to 2009, a number of companies made multiple acquisitions, notes Irving Levin.Amedisys made 52 purchases; LHC Group Inc. 40; Odyssey 31; Option Care 28; Almost Family Inc. 16; Apria 15; and Gentiva 15.

Publicly traded companies were buyers in 74 percent of the publicly announced M&A deals during the time period, Irving Levin says. Florida, California, Texas, Georgia, Illinois, New York, Tennessee, and Arizona were the states where the highest numbers of targets were located for all deals.

The most active year dollar-wise during the decade was 2008, with $2.4 billion in home care mergers and acquisitions announced, Irving Levin says. "For the same period, the greatest number of home health care mergers and acquisitions announced in one year was 73, in 2005."