AccentCare Inc. and Seasons Hospice & Palliative Care are merging.
Dallas-based AccentCare — owned by global private equity firm Advent International — is among the five largest home health providers in the country, according to industry data. The Rosemont, Illinois-based Seasons holds the same distinction in the U.S. hospice market.
“Accentcare is doing very, very well,” Todd Stern, CEO of Seasons, told Home Health Care News. “Seasons was not out, determined to find a partner. This is a marriage of opportunity.”
Once finalized, the merger between AccentCare and Seasons will reshape the post-acute care market, with the combined entity being one of the deepest around in terms of geographic footprint and portfolio of services. The companies are expected to publicly announce their agreement late Monday, with financial terms of the deal not disclosed.
There are several advantages to the merger, AccentCare CEO Steve Rodgers told HHCN.
By teaming up, AccentCare and Seasons will be better equipped to serve patients and referral sources as individuals’ needs change, for example. The move is likewise “extremely complimentary,” with AccentCare’s home health footprint closely matching Seasons’ hospice footprint, especially in major metropolitan areas.
“This is incredibly complimentary to our own approach toward strategic markets and being very focused on working with large health systems,” Rodgers said. “Todd and I both have a focus on being in large urban marketplaces. If you just go down the list of cities where we have a very significant presence now, we’re in the top cities in the United States. We’re in Boston, Chicago, Dallas, Houston, San Francisco, Los Angeles, Denver — and the list goes on.”
AccentCare delivers home health, hospice, personal care and care management services to more than 145,000 patients and clients annually, doing so across more than 179 locations in 17 states. In addition to growing organically, the company has landed several strategic partnerships with payers and health systems over the past few years, with its latest being a sizable joint venture with Fairview Health Services in Minnesota.
Advent International acquired AccentCare in May 2019 from its former PE backer, Oak Hill Capital Partners.
“Advent is a world-class private equity organization,” Rodgers said. “They’ve been incredible partners of ours, both in continuing to shore up the base infrastructure in the organization over the last 16 months as well as in preparing us to faze into a very significant opportunity like this.”
Seasons Hospice & Palliative Care offers end-of-life care services to upwards of 30,000 patients a year. Its current operations span 19 states and 31 Medicare-certified programs, inclusive of 22 facility-based and freestanding in-patient centers.
“Together, we can deliver a superior patient and family experience, ultimately serving our continuum of care partners even better, many of which want multiple service lines and multiple forms of care,” Stern said. “Our ability to take multiple service lines in common markets and innovate with the collective expertise made this a marriage worth doing.”
The combined AccentCare-Seasons enterprise will operate over 225 sites of care across 26 states, employing nearly 30,000 workers. It will have over 60 total partnerships with health systems and physician practices, collectively providing care to more than 175,000 patients and families each year.
AccentCare and Seasons expect to finalize the merger before the end of 2020, pending regulatory approvals. While they wait for that to happen, leaders from both organizations have started to execute upon their integration strategy, which will likely require ample time and resources considering the transaction’s sheer size.
Rodgers will serve as CEO of the new AccentCare-Seasons enterprise, which will keep AccentCare’s current headquarters of Dallas.
Stern will lead the hospice department — operating out of Rosemont — once AccentCare’s hospice services are combined with Seasons’ existing operations. He will also serve as executive vice chair of the combined organization.
On a broader level, Monday’s news adds to what has been a red-hot stretch for post-acute care dealmaking, particularly for hospice assets, which have typically come with hefty price tags. Last week, for instance, Addus HomeCare Corporation (Nasdaq: ADUS) announced a $192 million acquisition of Queen City Hospice and its affiliate, Miracle City Hospice.
AccentCare looked at many of the hospice businesses that came on the market, Rodgers said. Its leadership team started talking with Seasons toward the end of last year, however, and a merger seemed to make perfect sense.
“Todd and I got to know each other over the course of the year,” he added. “I think we had a mutual respect for each other and our organizations. I think we started getting excited about what we could do together. As we got into the late summer and early fall, things started taking off for us.”
While both CEOs declined to comment on financial details, Rodgers noted that the combined company should have annual revenues somewhere in the range of Encompass Health Corporation (NYSE: EHC) and LHC Group Inc. (Nasdaq: LHCG), which were ranked as fourth- and third-largest home health providers in 2019 by LexisNexis Risk Solutions.
“Let’s just say we’ll be fast approaching that general size and breadth,” Rodgers said.
For context, Encompass Health’s home health and hospice segment reported $1.09 billion in net services revenues in 2019. LHC Group, meanwhile, recorded $2.08 billion in net services revenues last year.
Until the merger is completed, all patients will continue to have access to their same care routines and will continue to use their current insurance plans. Each organization will share updates with patients and partners before any changes taking place, Rodgers and Stern noted.
In addition to Fairview, AccentCare’s existing joint ventures include partnerships with Asante, a large health system based in Oregon. That list also includes relationships with Baylor Scott & White Health, UCLA Health and several others.
With more than 30 strategic partnerships, Seasons has similarly made a name for itself with health systems, hospitals and payers. Moving forward, the merger should only benefit those partnerships, according to Stern.
“The hope that this is only positive,” he added. “There are some customers in the continuum of care that want all services, right? And there are some that just want parts. For those that want parts, nothing will change. For those that want more, I think we have a lot of opportunity to offer more to existing customers and care partners on both sides of the care aisle.”
Subsidiaries covered in the agreement include Health Resource Solutions, home health provider in Illinois, Nebraska and Indiana with a patient census of about 2,500. Gareda, a personal care business in Illinois that serves about 4,500 clients a year, is also covered.
This is a developing story. Please check back shortly for additional updates.
The post AccentCare, Seasons Hospice to Merge appeared first on Home Health Care News.