BrightSpring Health Services Announces Definitive Agreement to Acquire Haven, Expanding Its Hospice Services into the CON State of Florida

Rhea-AI Summary

BrightSpring Health Services (NASDAQ: BTSG) has announced a definitive agreement to acquire the assets of Haven Hospice in Florida for $60 million. Haven holds a Certificate of Need for comprehensive hospice care in 18 counties. This acquisition allows BrightSpring to expand its hospice services into Florida, an important yet challenging market to enter. The deal includes $15 million in cash, $30 million in Company equity, and $15 million in a seller note payable in four years. The acquisition is set to close in Q3 2024.

Positive

• Acquisition of Haven Hospice for $60 million expands BrightSpring's market into Florida.
• Haven Hospice holds a Certificate of Need, allowing BrightSpring to provide care in 18 counties.
• Deal structure includes $30 million in Company equity, signaling strong investor confidence.

Negative

• High initial cash outlay of $15 million may strain liquidity.
• Future financial liabilities include a $15 million seller note payable in four years.

Insights

Financial Analyst

BrightSpring Health Services' acquisition of Haven Hospice is a notable move in the healthcare sector, especially given the $60 million investment. The payment structure—$15 million in cash, $30 million in Company equity and $15 million in a seller note payable in four years—indicates a well-thought-out financial strategy. This diversified payment method minimizes immediate cash outflow while demonstrating confidence in the company's future stock performance. It's worth noting the potential dilution effect on existing shareholders due to the equity portion of the deal. However, the strategic entry into the Florida hospice market, a state with a Certificate of Need (CON) requirement, can offer long-term growth prospects, possibly offsetting any initial dilution. Investors should keep an eye on quarterly earnings post-acquisition to gauge the integration's success and its impact on overall financial health.

Healthcare Market Analyst

This acquisition significantly expands BrightSpring's footprint in the hospice care market, particularly in a CON state like Florida, which has stringent entry requirements. The Certificate of Need (CON) regulation limits the number of providers, often leading to reduced competition and potentially higher reimbursement rates. By acquiring Haven Hospice, BrightSpring not only gains access to 18 counties but also benefits from an established caregiving framework and patient base. Given the increasing demand for hospice services amid an aging population, this acquisition positions BrightSpring for sustained growth and increased market share. However, the execution risk remains—ensuring seamless integration without disrupting current services will be critical for realizing these growth opportunities.

Legal Expert

The acquisition involves navigating complex regulatory landscapes, particularly due to Florida's Certificate of Need (CON) requirements. Such regulations are designed to control the supply of healthcare services, making market entry difficult but rewarding for compliant entities. BrightSpring's successful agreement to acquire Haven Hospice indicates thorough due diligence and compliance with these legal stipulations. However, investors should be aware that any regulatory changes to the CON framework could affect future profitability and market positioning. Continuous compliance and regulatory monitoring will be important for BrightSpring to maintain its newly acquired market presence.

LOUISVILLE, Ky., June 24, 2024 (GLOBE NEWSWIRE) -- BrightSpring Health Services (“BrightSpring” or “the Company”) (NASDAQ: BTSG), a leading provider of home and community-based health services for complex populations, today announced a definitive agreement to acquire the assets of North Central Florida Hospice, Inc. and Haven Medical Group, LLC (collectively “Haven Hospice”), a Florida-based company holding a Certificate of Need (CON) for comprehensive hospice care services in 18 counties in north central Florida.

“We are excited to welcome Haven Hospice into BrightSpring, bolstering our existing hospice care line of business and expanding our hospice services into the CON state of Florida,” said BrightSpring’s President and CEO Jon Rousseau. “The delivery of compassionate hospice care is critical for patients and their families, and we’re committed to delivering that to high-need Floridians. It is extremely difficult to enter the Florida hospice market, and with this recent expansion of services, we can now provide high-quality care to more patients and their families during the most difficult time in their lives.”

BrightSpring’s acquisition of Haven will allow the Company to provide advance care planning, palliative, and hospice services throughout Florida Agency for Health Care Administration service areas 3A, 4A, and 4B. Total consideration for the acquisition is $60 million, with $15 million in cash at close, $30 million in Company equity at close, and an additional $15 million in a seller note payable four years after closing.

The acquisition is expected to close in the third quarter of 2024.

For more information, please visit https://www.brightspringhealth.com/.    

About BrightSpring Health Services

BrightSpring Health Services is the parent company of leading service lines that provide complementary and integrated home- and community-based pharmacy and health solutions for complex populations in need of specialized and/or chronic care. Through the company’s service lines, including pharmacy, primary care and home health care, and rehabilitation and behavioral health, we provide comprehensive care and clinical solutions in all 50 states to over 400,000 customers, clients and patients daily.

Forward Looking Statements

The statements contained in this press release that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on BrightSpring’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. These expectations, beliefs, and projections are expressed in good faith and BrightSpring believes there is a reasonable basis for them. However, there can be no assurance that these expectations, beliefs, and projections will result or be achieved. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond BrightSpring’s control. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in BrightSpring’s filings with the Securities and Exchange Commission (the “SEC”) under caption “Risk Factors,” including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and subsequent other filings BrightSpring makes with the SEC from time to time. Any forward-looking statement in this press release speaks only as of the date of this release. BrightSpring undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Media Contact:
Leigh White
Leigh.white@brightspringhealth.com
502.630.7412

FAQ

What is the acquisition deal announced by BrightSpring Health Services?

BrightSpring Health Services announced a $60 million deal to acquire Haven Hospice, expanding its services into Florida.

How much is BrightSpring paying to acquire Haven Hospice?

BrightSpring is paying $60 million, with $15 million in cash, $30 million in Company equity, and a $15 million seller note payable in four years.

When is the acquisition of Haven Hospice by BrightSpring expected to close?

The acquisition is expected to close in the third quarter of 2024.

What services will BrightSpring provide after acquiring Haven Hospice?

BrightSpring will provide advance care planning, palliative, and hospice services.

What is the significance of the Certificate of Need held by Haven Hospice?

The Certificate of Need allows BrightSpring to offer comprehensive hospice care in 18 north central Florida counties.

How will the acquisition of Haven Hospice impact BrightSpring's business?

The acquisition will expand BrightSpring's hospice services into Florida, enhancing its market presence and service capabilities.