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Addus HomeCare Corporation has announced the acquisition of JourneyCare, one of Illinois' largest hospice providers, for approximately $85 million. This strategic move will enhance Addus’ hospice services, adding around $55 million in annual revenues and a patient census of 750. The acquisition is expected to close by February 1, 2022, following regulatory approvals. Addus plans to finance the deal using cash and its revolving credit facility, aiming for nominal accretion during the first year as integration occurs.
Positive
Acquisition of JourneyCare adds approximately $55 million in annual revenues.
The deal enhances Addus' hospice service capabilities and market presence in Illinois.
JourneyCare has a strong reputation and established presence, providing synergy for Addus.
Negative
Integration challenges may arise during the transition period post-acquisition.
Company Adds Significant Hospice Presence in Illinois with Annual Revenues of Approximately $55 Million and Census of Approximately 750 Patients
FRISCO, Texas & GLENVIEW, Ill.--(BUSINESS WIRE)--
Addus HomeCare Corporation (Nasdaq: ADUS), a provider of home care services, and JourneyCare, Inc. (JourneyCare), one of the largest hospice and palliative care providers in Illinois, today jointly announced the execution of a definitive agreement under which Addus will acquire substantially all the assets of JourneyCare, for an anticipated purchase price, after customary purchase price adjustments, of approximately $85 million. Based in Glenview, Illinois, JourneyCare serves an average daily adult census of approximately 750 patients in a surrounding 13 county territory. The parties expect to close the transaction on or about February 1, 2022, following completion of all required regulatory approvals, subject to customary closing conditions. Addus will fund the acquisition through a combination of cash on hand and the Company’s revolving credit facility.
Commenting on the announcement, Dirk Allison, Chairman and Chief Executive Officer of Addus HomeCare Corporation, stated, “JourneyCare has a long, rich history as a not-for-profit hospice care provider in the Chicago area. Addus will leverage our scale and expertise to provide best-in-class hospice services. With the recent addition of Summit Home Health, the proposed acquisition of JourneyCare will mark the achievement of our goal to own and operate all three levels of home care in Illinois. We anticipate the acquisition to be nominally accretive during the first twelve months as we work through the integration of the acquisition into our standard operating model.
“We believe JourneyCare will be an ideal addition for Addus with an established market presence and excellent reputation for quality care. We look forward to expanding our market reach in Illinois and offering patient-centered hospice services to more individuals who will benefit from compassionate care in their homes.”
Kimberly Hobson, President and Chief Executive Officer of JourneyCare, added, “We very carefully selected Addus to carry forward the JourneyCare clinical operations, and we believe this combination will benefit our employees, patients and everyone associated with JourneyCare. We share the same commitment to providing quality, end of life care, and we look forward to working together to close this important transaction.”
Allison added, “Acquisitions are an important part of our growth strategy, and we are pleased to start 2022 on a strong note. Our development team continues to do an outstanding job of identifying strategic acquisitions and our strong capital structure supports our ability to continue this successful track record. We look forward to the growth opportunities ahead for Addus in 2022.”
Bass Berry Sims, PLLC served as legal counsel to Addus. JourneyCare was represented by Arnold & Porter as legal counsel and The Braff Group acted as its investment banker.
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 44,500 consumers through 207 locations across 22 states. For more information, please visit www.addus.com.
About JourneyCare
JourneyCare is a nonprofit, community-based organization that provides care and support to families living with serious illness. With more than 40 years of healthcare leadership and expertise, JourneyCare has achieved national recognition for growth, innovation, community partnerships and best practices in caring for seriously ill adults and children. JourneyCare is licensed to serve 13 counties in the Chicago region and is one of the largest providers of hospice and palliative care in Illinois. To learn more, visit www.journeycare.org.
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.
