Gentiva, a home health and hospice operator backed by Clayton Dubilier & Rice, announced on February 28, 2023 that it would acquire ProMedica's home health and hospice business for $710 million. The deal is expected to close in the second half of 2023. The acquisition will give Gentiva a significant presence in the Midwest and Southeast, where ProMedica is a strong player. Gentiva will also gain access to ProMedica's expertise in providing care to patients with complex medical conditions. The business was originally acquired as part of the HCR Manorcare, Inc. Chapter 11 bankruptcy reorganization and acquisition in 2018.
Home Health and Hospice EBITDA Multiples
ProMedica's home health and hospice operations was reportedly marketed off between $80 and $100 million of EBITDA, which would imply a multiple within the range of 7.1x to 8.9x EBITDA. The implied multiple at the mid-point ($90 million) is actually the lowest in our database for a home-based services deal over $200 million. The other four transactions in the top five were announced in 2016 or earlier.
ProMedica's Home Health and Hospice Revenue Trends
According to ProMedica's audited financial statements, its home health and hospice business generated revenue of $673 million in FY 2022, implying a revenue multiple of 1.06x and EBITDA margins within the range of 12% to 15%. Revenue has remained essentially flat since the HCR Manorcare transaction (FY 2019 revenue of $671 million).
Other Home Health and Hospice Deals
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About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 169 home-based services deals going back to 2010, 113 of which include reported EBITDA multiples. The home health and hospice databases can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about your specific situation.