Aveanna Healthcare has been making large acquisitions in the Home Care industry.
Aveanna Healthcare Completes Acquisition of Comfort Care
On December 13, 2021, Aveanna Healthcare Holdings Inc. (NASDAQ: AVAH), a leading, diversified home care platform focused on providing care to medically complex, high-cost patient populations, announced that it has successfully completed the acquisition of Comfort Care, a leading adult home health and hospice company with operations in Alabama and Tennessee, for $345 million, representing $290 million of value, net of the present value of approximately $55 million in estimated net tax benefits. Comfort Care is expected to be fully integrated into Aveanna during 2022, with the majority of the integration process occurring in the first 180 days.
Founded in 2000, Comfort Care provides both skilled Home Health & Hospice services to the traditional Medicare patient population through a network of 31 locations, primarily throughout the state of Alabama, with a growing presence in Tennessee. Comfort Care generates approximately $100 million in annual revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... on a current run rate basis with approximately 47% of its revenues derived from home health and approximately 53% of its revenues derived from hospice services.
Rod Windley, Executive Chairman of Aveanna, commented: “The addition of Comfort Care advances Aveanna’s strategy of expanding our Home Health and Hospice segment by adding density in demographically attractive markets for skilled adult care services. Comfort Care has an established reputation in Alabama, a growing presence in Tennessee, and a strong management team that will allow us to bring Aveanna’s high standards of care to even more patients and families. We’re excited to welcome Comfort Care’s talented professionals and exceptional capabilities to Aveanna, enhancing our ability to serve fast-growing, attractive markets.”
Alan G. Parker, Chief Executive Officer of Comfort Care, said: “At Comfort Care, we have always been dedicated to providing our patients the highest level of quality care with empathy and professionalism. We were attracted to Aveanna because they share these same fundamental values. We look forward to continuing to grow and serve as part of the Aveanna family.”
Aveanna funded the Comfort Care acquisition from a combination of sources, including i) proceeds from a new $415 million term loan closed on December 10, 2021; ii) proceeds from a new $150 million securitization facility closed on November 12, 2021; and iii) cash from the balance sheetThe balance sheet is a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity..
Edge Healthcare Partners served as Aveanna’s financial advisor, and Greenberg Traurig, LLP as its legal advisor. Edgemont Partners served as Comfort Care’s financial advisor and Butler Snow, LLP as its legal advisor.
Aveanna Healthcare is headquartered in Atlanta, Georgia, and has locations in 30 states providing a broad range of pediatric and adult healthcare services including nursing, rehabilitation services, occupational nursing in schools, therapy services, day treatment centers for medically fragile and chronically ill children, and adults, home health and hospice services, as well as delivery of enteral nutrition and other products to patients. The Company also provides case management services in order to assist families and patients by coordinating the provision of services between insurers or other payers, physicians, hospitals, and other healthcare providers. In addition, the Company provides respite healthcare services, which are temporary care provider services provided in relief of the patient’s normal caregiver. The Company’s services are designed to provide a high-quality, lower-cost alternative to prolonged hospitalization.
Aveanna Healthcare Completes Acquisition of Accredited Home Care
On December 1, 2021, Aveanna Healthcare Holdings, Inc. (NASDAQ: AVAH) announced that it has successfully completed its acquisition of Accredited Home Care, a leading private duty services company based in Southern California, for a base purchase price of $180 million, plus up to $45 million subject to satisfaction of certain 2021 volume targets. Aveanna expects to fully integrate Accredited in 2022, with a majority of the integration process occurring in the first 180 days.
Founded in 1980, Accredited is one of the largest home care agencies in the Western United States, providing nursing and home health services to more than 9,000 patients annually through its team of 6,250 field nurses and caregivers. Accredited has been recognized as one of the nation’s HomeCare Elite in repeated years. Accredited has five offices located in Los Angeles, Orange, and San Diego counties. Accredited had approximately $114.8 million in revenue for the twelve months ended August 31, 2021. Accredited currently derives 86% of its revenues through Medicaid or other state-funded programs.
Rod Windley, Executive Chairman of Aveanna, said: “We are excited to add Accredited’s growing and well-respected business to Aveanna’s offerings in California. Accredited’s strong unskilled home care business has provided thousands of patients the ability to reduce their need for institutional care and reduce their overall healthcare expenditures. This combination will enhance Aveanna’s position in California to benefit from the accelerating utilization of a growing variety of home-based care options for patients and their families.”
Barry Berger, President and Founder of Accredited, said: “I formed this company in 1980 based on the core principles of maintaining a strong and ethical culture, always putting the patients first, and creating a positive work environment that values our associates for their outstanding contributions. We are pleased to have found in Aveanna a company that shares our commitment to excellence, professionalism, growth, and a family spirit. I am confident that the future with Aveanna is bright.”
Edge Healthcare Partners served as Aveanna’s financial advisor, and Greenberg Traurig, LLP as its legal advisor. The Braff Group served as Accredited’s financial advisor, and Yong Gruber Associates as its legal advisor.
Aveanna price target lowered to $12 from $15 at Raymond James
On November 23, 2021, Raymond James analyst John Ransom lowered the firm’s price target on Aveanna to $12 from $15 and keeps a Strong Buy rating on the shares. Results came in below expectations as labor pressure in PDS led to an 11% miss on volumes that was only partially offset by better margins/cost controls, Ransom tells investors in a research note.
Aveanna price target lowered to $12 from $17 at BMO Capital
On November 18, 2021, BMO Capital analyst Matt Borsch lowered the firm’s price target on Aveanna to $12 from $17 but keeps an Outperform rating on the shares after its Q3 results. The company’s sales mix shift from pediatric to adult care should put Aveanna in a strong position given the current trends, the analyst tells investors in a research note, adding that he believes investors undervalue Aveanna’s “unique” potential around near-term lags in adult-care reimbursement to wage inflation.
📺 Meet Aveanna[embedyt] https://www.youtube.com/watch?v=zbaIhQAr50g[/embedyt]
📈 Aveanna Healthcare Stock Technical Analysis
The short-term trend is positive, while the long-term trend is neutral. So this is evolving in the right direction. AVAH is one of the lesser performing stocks in the Health Care Providers & Services industry. 100% of 132 stocks in the same industry do better. AVAH is currently trading in the lower part of its 52-week range, which is not a good signal considering that the S&P500 Index is trading near new highs.
There is a resistance zone ranging from 7.41 to 7.42. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames. There is also resistance at 7.62 from a trend line in the weekly time frame. Finally, there is resistance at 8.20 from a trend line in the daily time frame.
There is a support zone ranging from 6.97 to 6.99. This zone is formed by a combination of multiple trend lines and important moving averages in the daily time frame. There is also support at 6.08 from a horizontal line in the daily time frame.
AVAH has an average technical rating and it also does not offer a high-quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when AVAH stock consolidates and is a good entry.