Hospice: Addus HomeCare's Acquisition of Queen City Hospice
On November 11th, Addus HomeCare announced it was purchasing Queen City Hospice, LLC, an Ohio-based hospice agency with three locations, for $192m ($162.8m net of a tax benefit worth $29.2m). Queen City reportedly generates revenue and EBITDA of $56m and $8m annually, respectively, representing nosebleed multiples of 3.4x revenue and 24x EBITDA. The $8m EBITDA figure is likely prior to de novo/pro forma adjustments, but the multiples are still surprisingly high, and indicative of a hot segment that may be getting even hotter.
Both multiples are the highest in our database for a hospice provider, and compare favorably to the Care Hospice and St. Croix Hospice deals announced just the month prior, which both reportedly occurred in the 15x EBITDA range.
Home Health Care News' report on the deal includes commentary indicating that these valuations could be part of trend, as home health and personal care organizations pursue strategies that involve acquiring hospice agencies in their core geographical markets.