T.S. Eliot said that April is the cruelest month. He must have been an investor in the 2022 stock market.

Stocks took a beating across the board in April, with the S&P falling nearly 10%. And according to the Home Health (HHI) and Post-Acute Care (PAI) indices from national mergers and acquisitions advisory firm Stoneridge Partners, home health and post-acute care companies were certainly not immune to the market’s decline.

“Providers who made it out of the pandemic are now weathering supply chain issues, soaring increases in fuel prices and the lingering effects of the Great Resignation,” said Stoneridge Partners Managing Partner Brian Bruenderman. “But these challenges are facing all businesses, not just the healthcare sector – the S&P is off to its worst start since 1939. I wouldn’t regard weakness in the market overall as weakness in the market for home health and post-acute care.”

The Stoneridge HHI dropped more than 13% from March to April, while the PAI (what percentage drop?).

Home Health Index

Perhaps the most startling decline among companies on the Home Health Index was Amedisys, Inc. (Nasdaq: AMED), which dropped almost 26% from March to April. LHC Group, Inc. (Nasdaq: LHCG) was down by just shy of 2% over the same period.

Both Amedisys and LHC have had to deal with COVID-19-related disruption the first quarter with approximately 7% of each company’s clinicians in quarantine, leading to higher contract labor costs. The difference for Amedisys may have been the increase in gas prices – the company spends almost $4 million monthly on fuel.

Post-Acute Care Index

Addus HomeCare Corporation (Nasdaq: ADUS) also experienced a stock value dip in April, dropping by nearly 10%.

During Q1, Addus experienced its highest employee-quarantine rate ever at 4%. Hiring also became a company pain point. The company saw a 4% to 5% increase in per-hour pay for home health and hospice workers due to wage pressure.

Quote of the Month

“We know we are not alone on this one. The challenge can be that we are all struggling in one way or another and this can impact the amount of support one can get from others.” – Dr. Jacqueline Hidalgo, Psy.D. with Lee Health

Read the Full Article Here: Take Care of Yourself: May is Mental Health Awareness Month

Articles Featuring Stoneridge

Where is the activity in the healthcare M&A market right now? Home Health Care News turned to the experts at Stoneridge Partners to find out. See what Managing Partner Brian Bruenderman had to say about where the home health, home care and behavioral health markets stand right now — and where they may be heading.

Visit the Speaker Series Webinar Library on our website to watch our most recent Speaker Series discussing how to avoid common pitfalls when selling your healthcare business.

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)

Here are the results of the stock prices for the past two years:

Company 4/30/22 1 mos change YTD change 4/30/21 4/30/20
Amedisys 127.65 -25.91% -21.15% 269.85 184.16
LHC Group 165.85 -1.63% -20.86% 208.27 129.99
HH Index* 146.75 -13.90% -1.88% 239.06 157.08
S&P 4117.75 -9.51% -13.60% 4181.17 2912.43
Addus 84.28 -9.66% -9.87% 105.8 81.02

Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.

Enterprise Value (EV)

EV (in M) 2022 2021 2020
Amedisys 4660 9560 6470
LHC Group 5910 6430 4220
HH Index Total 10570 15990 10690
Addus 1450 1780 1130

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 2022 2021 2020
Amedisys 210% 452% 331%
LHC Group 266% 312% 203%
HH Index Average* 238% 382% 267%
Addus 168% 232% 189%

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company for its reporting. (Home Health Index May 2022 | Stoneridge Partners)

Exclusively Listed For Sale By Stoneridge Partners.

Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us at Stoneridge Partners.

Non-medical home care franchisee.  $9.6+M in revenue.  50% Medicaid/30% Private Pay/ 14% VA/ 6% Misc.  Experienced management team to stay post-transition.

 Home Care /  Multi-State

Hospice.  45+ ADC.  Rio Grande Valley.  No CAP or regulatory issues.

 Hospice /  Texas

$2M revenue home care agency.  100% private pay.  Primarily non-medical.  Skilled designation, not Medicare-certified.  W-2 caregivers.  Region 8.  Accredited.

 Home Care /  Florida

Profitable private-duty home health agency in Northern Virginia.  $1.5M in revenue.  20+ years in the community.

 Home Health /  Virginia

Profitable home care franchise with consistent sales growth.  Revenue of $1.3M.  Great reputation within the community.

 Home Care /  Iowa

$40M+ home care agency with 20+% AEBITDA.  Primarily private-duty, non-medical (90%).  Medicaid waiver programs.  40% family caregivers.  Multiple locations.

 Home Care /  Pennsylvania

Colorado Springs and surrounding areas.  Opportunity to grow existing small hospice.  Motivated Seller

 Hospice /  Colorado

Medicare-certified home health agency.  Houston/Kingwood area.  Approximately $600k in revenue.  Accredited.

 Home Health /  Texas

I/DD provider offering SCL & FHP services.  $3M in revenue.  Recent rate increase.

 I/DD /  Kentucky

Hospice.  30+ADC.  No CAP or regulatory issues.

 Hospice /  Illinois

Behavioral Health/Suboxone Clinic.  $900k in revenue.  21 years in business with stellar reputation.  Single office, great opportunities for expansion.  All cash paying patient base.

 Behavioral Health /  Kentucky

I/DD residential services.  $11M in revenue.  Highly profitable agency with long-standing reputation.  Community Residential Services (CRS) 4-bed model & Integrated Community Supports (ICS) apartment settings.

 I/DD /  Minnesota

Well established home health agency.  $4M in revenue.  Fully staffed.  Profitable.  Good history of compliance.

 Home Health /  Missouri

Home Health CON in Montgomery County.  Profitable agency generating over $1.3M in revenue.  95%+ Medicare.  Built in marketing relationship and growth potential.

 Home Health /  Maryland

Skilled Home Health & Private Duty. $4.4 million in revenue. 22% census increase over last year. Established over 23 years.

 Home Health /  Florida

Medicare/Medicaid Home Health agency. $8 million in revenue. Long history in the community.

 Home Health /  Oklahoma

86 patient hospice located Northeast of Houston, TX. $4M+ in revenue with 20% + adjusted EBITDA. Full staff in place. Excellent record of compliance.

 Hospice /  Texas

Medicare-certified home health agency. District 7. Census of approximately 30 patients. Accredited.

 Home Health /  Florida

Hospice. 150 ADC. Strong growth. Expertly run with administrative team willing to stay involved. No CAP or regulatory issues.

 Hospice /  Southwest

Mental Health Treatment Center. $1.1M in revenue. Long-established, profitable practice. Full spectrum of medical treatment and therapy services.

 Behavioral Health /  Indiana

Medical Staffing Agency. $4.6M in revenue. Established over 25 years. Excellent rapport with regional hospital network.

 Other /  Kentucky

Medicare home health agency.  Health system relationship.  Rare KY CON opportunity, multiple counties

 Home Health /  Kentucky / Popular

Home health with $8M in revenue.  Medicare/Medicaid-certified.  90+% traditional Medicare/episodic.  Services central Texas and licensed for entire state.  Strong management team in place.

 Home Health /  Texas

Medicare-certified home health agency.  Houston-area.  Minimal census.

 Home Health /  Texas

Medicare-certified home health agency.  $1M+ in revenue.  Long-established agency with excellent community rapport.

 Home Health /  Texas

$19.5M large home care franchisee.  89% Medicaid.  Well-established company operating more than 20 years.  Phenomenal year-over-year revenue growth.

 Home Care /  Illinois / Popular

Home Health Index May 2022 | Stoneridge Partners

From Brian Bruenderman, Publisher of “Home Health Index.” Brian can be reached at [email protected] or (239) 561-0826, and toll-free at 800-218-3944. Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Amedisys | LHC Group