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Hospice Valuation Multiples: VITAS Acquires Non-Profit Covenant Care for $85m

VITAS Healthcare Corporation, a subsidiary of Chemed Corporation (NYSE: CHE), announced an agreement to acquire all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc. d/b/a/ Covenant Care for $85 million (the related entity is Covenant Hospice Inc., which includes both the hospice operations and the relatively small ALF). The deal expands VITAS' presence across the Florida panhandle and marks its entry into the Alabama hospice market, specifically including the Tallahassee, Marianna, Fort Walton Beach, Panama City, Crestview and Pensacola markets in Florida, and the Dothan and Mobile/Daphne markets in Alabama.

Hospice EBITDA Multiples

According to the Covenant Hospice FY 2022 Form 990, it generated revenue of ~$58.7m excluding grant and investment income, which resulted in EBITDA from operations of ~$4.7m and implies multiples of ~1.45x revenue and ~18x EBITDA. FY 2022 results declined from 2021, when EBITDA from operations was $7.8m, implying a more reasonable ~10.8x multiple. The valuation likely assumes a return to 2021 profit levels combined with some additional margin improvement over time, consistent with the majority of non-profit acquisitions by for-profit entities.

Covenant Care Acquired by VITAS
Hospice EBITDA Multiples

VITAS's Acquisition History

For a large subsidiary of a publicly-traded company, VITAS is a very infrequent acquirer of hospices, making one small $1.24m deal in FY 2022. Otherwise, its most recent deal was the 2018 acquisition of another Florida non-profit, Hospice of Citrus County, for $11m. HOCC appears to have been a distressed asset, experiencing significant revenue declines in recent years, and generating a loss from operations in the most recent year prior to the deal. With FY 2017 revenue of $22.5m, the deal implied a revenue multiple of ~0.5x.

Other Home Health and Hospice Deals

See below for Scope Research's take on other home health and hospice transactions:

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 with questions about your specific situation.


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