November 2017 M&A activity highlighted continued momentum on several compelling themes:
- Home health and hospice as attractive care settings. We continue to see low cost, high quality care delivery settings as an investment focus for consolidation. The volume of M&A activity in these areas is being driven by strong demographic trends, stable reimbursement, and a spike in coordinated care and population management initiatives.
- Member engagement solutions are a growing focus. Health plans continue to recognize the importance of engaging members, and have an increased appetite for technology platforms that deliver customized communications enabling better care coordination to ultimately improve outcomes. Companies with the proven ability to enhance member awareness are becoming increasingly valuable to health plans and investors alike.
- Autism service providers are favorites in behavioral health. Behavioral health assets have remained attractive to investors, with autism service providers drawing particular interest. With favorable tailwinds and improving reimbursement amongst a fragmented and scalable business model, these providers stand out in the behavioral investment landscape.
Several transactions fitting these themes caught our attention in the month of November:
- LHC Group and Almost Family, leading nationwide providers of home health services, announced a merger of equals. The merger will create a nationwide network of providers with over 750 locations, enabling greater service and continuity across the continuum of care. The transaction is expected to prove immediately accretive with an estimated $25M in identified synergies. The well-capitalized combined entity will be positioned to lead the transition to value-based reimbursement.
- Webster Capital announced its acquisition of Bristol Hospice, a multi-regional provider of hospice and palliative care services. Bristol Hospice is headquartered in Salt Lake City, Utah and has 11 locations across seven states. The acquisition allows Bristol to focus on its high quality care delivery while addressing the growing need for hospice services.
- Revel Health, a data-driven health engagement company, announced it has secured a growth equity investment from TT Capital Partners (TT Capital Partners is part of the TripleTree platform). The investment will accelerate Revel’s expansion into new target markets and advance its innovation and technology development efforts. Revel is known for its unique ability to engage health insurance members in their own healthcare, enabling the healthcare system to support the individual, deliver better health outcomes, and reduce unnecessary costs.
- Baird Capital acquired an interest in Hopebridge, an Indianapolis-based provider of outpatient therapy to children and adolescents with developmental and behavioral difficulties. Hopebridge provides Applied Behavior Analysis, occupational therapy, physical therapy, and speech therapy to children on the autism spectrum. Hopebridge currently operates 15 clinics in Indiana, Ohio, and Kentucky.
TripleTree and TT Capital Partners continuously monitor the market to identify the trends impacting the healthcare industry and deliver uncommon clarity to our clients. Let us know your thoughts and thanks for reading!