Atlanta-headquartered Aveanna Healthcare Holdings Inc. (Nasdaq: AVAH) has seen recent growth across all three of its healthcare segments. The company is narrowing its strategic sights toward hospice and home health
Aveanna offers hospice and home health, private duty and medical solution services across 39 states. The company provides care to medically complex and chronically ill adult and pediatric patient populations
High multiples have dampened merger and acquisition opportunities in the hospice space, Aveanna CEO Jeff Shaner said in an earnings call on Thursday. The company is seeking hospice and home health expansion through organic growth while not ruling out the potential for M&A deals, he indicated
“The remaining part of our growth in our de novo/M&A growth will really be on more home health and hospice,” Shaner said. “We love hospice, we just don’t love the multiples of hospice. We’ve got the best-in-class home health and hospice team, and with the cash generation we’re doing now, we think we can begin to grow in that business on an inorganic and organic basis.”
Aveanna’s overall revenue reached $670.5 million in the second quarter, and its adjusted EBITDA was $95.4 million, each rising year over year by 13.7% and 8%, respectively
All three of the company’s service lines saw year-over-year increases during Q2. Aveanna’s hospice and home health revenue reached $69 million, rising by 14.8%. The provider’s private duty services revenue hovered around $554 million, growing by 14%, while its medical solutions’ revenue, at $47.5 million, rose by 9.4%
“Aveanna’s second quarter results continued our momentum with our team executing at a high level across all three divisions,” CFO Matt Buckhalter said in a press release
Aveanna’s hospice and home health growth was in part attributed to an increase of 10,500 total patient admissions. Additionally, the company has leaned hard into its preferred payer and government affairs strategies to foster growth in this segment and other businesses. Aveanna’s preferred payer strategy is focused largely on Medicare Advantage and Medicaid Managed Care Plans
The company set a goal for a total of 38 payer agreements in 2026. Aveanna signed three agreements during Q2 and is in line to meet its targets, Shaner said. The preferred payer strategy allows for increased investment in employee wages and clinical recruitment efforts, he indicated during the earnings call
Aveanna has largely focused on organic growth and tuck-ins across its geographic markets. The company’s five-pronged strategy involves strengthening relationships with payers, finding opportunities to reduce costs, modernizing its medical solutions services, optimizing capital structure and cash flow and increasing engagement among staff and leadership
The company has been less active on the hospice and home health M&A front amid high price tags in these spaces, Shaner previously indicated. Among the few transactions in Aveanna’s recent purview was its $175.5 million purchase of Family First Homecare, which was completed in June. The Florida-based company’s pediatric home care and private duty nursing services spanned 27 locations in seven states. Aveanna expects the acquisition integration process to wrap up by the end of the fourth quarter.
The acquisition has strengthened Aveanna’s ability to geographically expand, primarily in rural regions, Shaner said. Similar deals could be on the horizon as the company focuses on hospice and home health growth, he indicated
“We’d like to see similar types of acquisitions on the home health and hospice side, where we start to materially move our home health and hospice business from an inorganic growth standpoint,” Shaner said. “The model is here. We have a great team.”
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Aveanna Healthcare Holdings
