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Amedisys boosts hospice ops with CCH
Posted on Wednesday, 10 October 2018 14:04
Amedisys is acquiring Compassionate Care Hospice (CCH) for USD 340.00 million to become the third-largest hospice care provider in the US with a pro forma footprint of 474 centres in 38 states and the District of Colombia.

The deal, which is inclusive of USD 50.00 million in tax asset and working capital-related payments, equates to 12.6x earnings before interest, tax, depreciation and amortisation (EBITDA) of USD 26.94 million, for the 12 months ended 31st May 2018.

In terms of metrics, the post-acquisition balance sheet remains flexible for continued inorganic growth opportunities, with an initial leverage ratio of 1.5x.

Founded in 1993, CCH is a community-based organisation providing services to over 3,300 patients daily and employs more than 2,300 professionals in 53 locations across 24 states.

The company generated adjusted EBITDA of USD 26.92 million on revenue of about USD 188.00 million in the 12 months to 31st May 2018 and will add 12 new states to Amedisys’ existing hospice network.

Strategies for expanding margin in large care centres for 2019, once the deal closes by 1st February 2019, include adding sales resources to accelerate growth in the second half of 2019 and 2020, retention packages for key employees, and staffing model and regional infrastructure.

Founded in 1982, and headquartered in Baton Rouge, Amedisys is an independent home health, hospice and personal care company, whether that is home-based, recovery and rehabilitation after an operation or injury, or managing a chronic disease.

The company’s enlarged hospice operations will increase to 136 locations in 34 states with average daily census of 11,000 patients and about 5,700 staff.

In the six months ended 30th June 2018, the pre-purchase division generated net service revenue of USD 198.70 million and operating profit of USD 56.10 million.

Amedisys has made other acquisitions across its home health, hospice and personal care activities include Christian Care at Home for USD 2.30 million in March 2018 and East Tennessee Personal Care Services for USD 2.00 million in May.

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