Addus HomeCare's footprint grows through $350 million deal

Addus HomeCare extended its reach into the personal care space Monday, announcing a $350 million deal to acquire Gentiva’s home care business.

The acquisition will help the Frisco, Texas-based company expand its footprint in Arizona, Arkansas, California and Tennessee and provide personal care services in three new states: Missouri, Texas and North Carolina. Addus already provides hospice services in Texas.

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Acquiring Atlanta-based Gentiva’s home care business will give Addus access to an additional 16,000 new patients a day and help the company build scale at a time when home care providers face rising labor costs and regulatory challenges, Addus HomeCare Chair and CEO Dirk Allison said in a news release.

Addus is one of the nation’s largest providers of non-medical home care services which assists patients with activities of daily living, such as bathing, toileting and meal preparation. The company also provides home healthcare and hospice services across 23 states.

Allison told analysts during a quarterly earnings call in March the company would be looking to buy home care companies that want to avoid a new federal regulation that will require them to spend 80% of Medicaid reimbursements on caregiver pay. That rule is set to go into effect in six years.

Allison said last fall the company may also exit states where Medicaid reimbursements are too low and regulations are too rigid. Last month, Addus announced plans to sell its personal care business in New York to Brooklyn, New York-based HCS-Girling for $23 million, citing ongoing regulatory and reimbursement challenges.