In another sign that mergers and acquisitions are heating up, Dallas and Nashville-based private equity firm Pharos Capital Group has added another hospice and home healthcare agency to its stable of businesses.
The firm announced Tuesday it acquired Houston-based Providence Hospice and Providence Home Health Services through its post-acute provider platform Charter Health Care Group. Pharos Capital Group did not release any financial details of the deal.
Bob Crants, Pharos Capital Group founding partner and chief investment officer, said robust demand since the COVID-19 pandemic has made home health and end-of-life even more lucrative.
“Such services are now increasingly seen as a mainstream component of high-quality patient care,” Crants said.
Providence, founded in 2006, offers in-home hospice, palliative care, skilled nursing, physical therapy and related services.
Pharos acquired California-based Charter Health Care Group in 2018 and over the past few years has made six acquisitions in the home health and hospice segments. Charter Health Care Group now employs 4,500 workers in seven states.
M&A activity has been on the rise in both the home healthcare and hospice spaces after taking a breather in the middle part of last year. According to the research firm Mertz Taggart, Medicare’s new Patient Driven Grouping Model (PDGM) payment system is spurring consolidation in the home healthcare sector. Throughout 2020, M&A activity in hospice eclipsed the number of deals in 2019.
In a report earlier this year, Mertz Taggart managing partner Cory Mertz predicted a confluence of factors will drive acquisitions throughout 2021. “The threat of a significant hike in the capital gains tax rate and owner burnout as a result of the pandemic are two common themes we are hearing from owners,” Mertz said.
