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Addus HomeCare Corporation has acquired JourneyCare, Inc. for approximately $85 million. This acquisition is set to enhance Addus's hospice operations as JourneyCare, a leading provider in the Chicago area, serves around 750 patients daily. The deal aligns with Addus's strategy to expand its service offerings in Illinois, where it already has a strong presence. The acquisition was funded through available cash and the company’s revolving credit facility. Addus aims to integrate JourneyCare's operations efficiently and continue pursuing growth through strategic acquisitions.
Positive
Strategic acquisition enhances Addus's hospice service capabilities.
Acquisition supports Addus's growth strategy in Illinois.
Addus has strong financial flexibility for future acquisitions.
Negative
Acquisition costs $85 million, which may impact short-term cash reserves.
Illinois Business Provides Hospice Services Producing Annual Revenues of Approximately $55 Million
FRISCO, Texas--(BUSINESS WIRE)--
Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home care services, announced that yesterday it completed the acquisition of substantially all the assets of JourneyCare, Inc. (JourneyCare) for a cash purchase price of approximately $85 million, after customary purchase price adjustments. Based in Glenview, Illinois, JourneyCare serves an average daily adult census of approximately 750 patients in a surrounding 13 county territory.
Commenting on the announcement, Dirk Allison, Chairman and Chief Executive Officer of Addus HomeCare Corporation, stated, “Completing the purchase of JourneyCare’s hospice operations is an exciting step for Addus. As we’ve discussed, JourneyCare is a leading provider of hospice care with a long history of serving the greater Chicago area. We already have a strong market presence in Illinois, and this acquisition enables us to provide all three levels of home care in Illinois, consistent with our broader growth strategy. We are delighted to welcome the operations team and clinical staff of over 500 dedicated employees to the Addus family. We now have an opportunity to leverage our combined expertise along with a shared commitment to providing compassionate, patient-centered care, and we look forward to an efficient integration of JourneyCare’s operations.
“Looking ahead in 2022, Addus will continue its strategic focus on acquisitions that meet our strategic criteria and complement our strong organic growth opportunities. We continue to have a solid pipeline of potential acquisitions and the financial flexibility to support our growth and further enhance our competitive position,” added Allison.
Addus funded the acquisition through a combination of cash on hand and the Company’s revolving credit facility.
About Addus HomeCare
Addus HomeCare is a provider of home care services that primarily include personal care services that assist with activities of daily living, as well as hospice and home health services. Addus HomeCare’s consumers are primarily persons who, without these services, are at risk of hospitalization or institutionalization, such as the elderly, chronically ill and disabled. Addus HomeCare’s payor clients include federal, state and local governmental agencies, managed care organizations, commercial insurers and private individuals. Addus HomeCare currently provides home care services to approximately 45,000 consumers through 209 locations across 22 states. For more information, please visit www.addus.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as “preliminary,” “continue,” “expect,” and similar expressions. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including discretionary determinations by government officials, the consummation and integration of acquisitions, anticipated transition to managed care providers, our ability to successfully execute our growth strategy, unexpected increases in SG&A and other expenses, expected benefits and unexpected costs of acquisitions and dispositions, management plans related to dispositions, the possibility that expected benefits may not materialize as expected, the failure of the business to perform as expected, changes in reimbursement, changes in government regulations, changes in Addus HomeCare’s relationships with referral sources, increased competition for Addus HomeCare’s services, changes in the interpretation of government regulations, the uncertainty regarding the outcome of discussions with managed care organizations, changes in tax rates, the impact of adverse weather, higher than anticipated costs, lower than anticipated cost savings, estimation inaccuracies in future revenues, margins, earnings and growth, whether any anticipated receipt of payments will materialize, any future impact to our business operations, reimbursements and patient population due to the recent COVID-19 global pandemic, and other risks set forth in the Risk Factors section in Addus HomeCare’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2021, which is available at www.sec.gov. Addus HomeCare undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, these forward-looking statements necessarily depend upon assumptions, estimates and dates that may be incorrect or imprecise and involve known and unknown risks, uncertainties, and other factors. Accordingly, any forward-looking statements included in this press release do not purport to be predictions of future events or circumstances and may not be realized.
