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Amedisys' Unit to Buy Personal Care Provider, Home Staff
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Associated Home Care – a personal care agency and a subsidiary of LA-based renowned home health and hospice provider Amedisys, Inc. (AMED - Free Report) – recently decided to buy a Massachusetts-based personal care provider, Home Staff, LLC,. While the financial terms of the transaction have been kept under wraps, the deal is expected to close on Feb 1, 2017.
Per the terms of the agreement, Associated Home Care will purchase Home Staff from Fallon Health and VNA Care Network. According to Amedisys, the buyout will not only expand the company’s personal care footprint in Massachusetts, but will also pave way for a future collaboration with Fallon Health, an innovative payor for managing vulnerable patients.
Falon Health and Amedisys together can work on programs like PACE (Program of All-Inclusive Care for the Elderly), SNPs (Special Needs Plans) chronic disease management and population health management.
Home Staff offers professional nurses, chore workers, companions, transportation, Personal Care Assistants, Certified Nursing Assistants and homemakers and covers areas like the Greater Metro Boston, Greater Worcester Region and the Western Massachusetts Region. The company delivers care to 3,500 clients per year and generates approximately $10.5 million in annualized revenues.
Share Price Performance
Over the past three months, Amedisys has significantly traded lower than the Zacks categorized Medical - Outpatient and Home Healthcare industry. In fact, an unimpressive third-quarter 2016 performance resulted in a further slump in the share price in the beginning of November. Further, the Centers for Medicare & Medicaid Services’ (CMS) recently proposed Home Health rule in 2017 proved grossly unfavorable for Amedisys. Per the last trading price, overall the company lost 13%, as against 8.2% gain of the broader industry over the last three months.
However, we are looking forward to the impending acquisition of Home Staff which will enable Amedisys to become the largest personal care provider in Massachusetts. Post closing of the deal, its Personal Care Division (AHC) will have the capacity to provide care to 15,000 clients annually at home. The deal will also allow the company to focus more on its strategies like investing in technology and work hand in hand with payors to create advanced solutions.
Notably, Amedisys’ long-term strategy is to evolve from a traditional home health and hospice care provider to a company focused on better serving the needs of patients and diversifying sources of payment so as to become less reliant upon Medicare. As a result, the company is developing and acquiring new business lines that will complement its existing home care and hospice business and help seniors manage their health more effectively and stay in their homes longer.
It is also working to develop or acquire new business lines that are focused on managing patients’ age-related diseases from their onset to the end of life. Currently, the company is working on additional opportunities for personal care tuck-in acquisitions in the Massachusetts and Southern New England markets and is also aiming to expand this platform in other states, particularly Florida, Tennessee and Pennsylvania where it has a strong Home Health and Hospice presence.
In line with this strategy, earlier this year, the company acquired Associated Home Care. In August, it acquired Professional Profiles, a private-duty home healthcare agency in Massachusetts. Home Staff will be the third acquisition in Massachusetts since Amedisys renewed its acquisition strategy in 2015.
Zacks Rank & Key Picks
Amedisys carries a Zacks Rank #5 (Strong Sell). Some better-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1(Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 22.6% over the last one year compared with the S&P 500’s 11.9% growth over the same period. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 21.7% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 114.7% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
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Amedisys' Unit to Buy Personal Care Provider, Home Staff
Associated Home Care – a personal care agency and a subsidiary of LA-based renowned home health and hospice provider Amedisys, Inc. (AMED - Free Report) – recently decided to buy a Massachusetts-based personal care provider, Home Staff, LLC,. While the financial terms of the transaction have been kept under wraps, the deal is expected to close on Feb 1, 2017.
Per the terms of the agreement, Associated Home Care will purchase Home Staff from Fallon Health and VNA Care Network. According to Amedisys, the buyout will not only expand the company’s personal care footprint in Massachusetts, but will also pave way for a future collaboration with Fallon Health, an innovative payor for managing vulnerable patients.
Falon Health and Amedisys together can work on programs like PACE (Program of All-Inclusive Care for the Elderly), SNPs (Special Needs Plans) chronic disease management and population health management.
Home Staff offers professional nurses, chore workers, companions, transportation, Personal Care Assistants, Certified Nursing Assistants and homemakers and covers areas like the Greater Metro Boston, Greater Worcester Region and the Western Massachusetts Region. The company delivers care to 3,500 clients per year and generates approximately $10.5 million in annualized revenues.
Share Price Performance
Over the past three months, Amedisys has significantly traded lower than the Zacks categorized Medical - Outpatient and Home Healthcare industry. In fact, an unimpressive third-quarter 2016 performance resulted in a further slump in the share price in the beginning of November. Further, the Centers for Medicare & Medicaid Services’ (CMS) recently proposed Home Health rule in 2017 proved grossly unfavorable for Amedisys. Per the last trading price, overall the company lost 13%, as against 8.2% gain of the broader industry over the last three months.
However, we are looking forward to the impending acquisition of Home Staff which will enable Amedisys to become the largest personal care provider in Massachusetts. Post closing of the deal, its Personal Care Division (AHC) will have the capacity to provide care to 15,000 clients annually at home. The deal will also allow the company to focus more on its strategies like investing in technology and work hand in hand with payors to create advanced solutions.
Notably, Amedisys’ long-term strategy is to evolve from a traditional home health and hospice care provider to a company focused on better serving the needs of patients and diversifying sources of payment so as to become less reliant upon Medicare. As a result, the company is developing and acquiring new business lines that will complement its existing home care and hospice business and help seniors manage their health more effectively and stay in their homes longer.
It is also working to develop or acquire new business lines that are focused on managing patients’ age-related diseases from their onset to the end of life. Currently, the company is working on additional opportunities for personal care tuck-in acquisitions in the Massachusetts and Southern New England markets and is also aiming to expand this platform in other states, particularly Florida, Tennessee and Pennsylvania where it has a strong Home Health and Hospice presence.
In line with this strategy, earlier this year, the company acquired Associated Home Care. In August, it acquired Professional Profiles, a private-duty home healthcare agency in Massachusetts. Home Staff will be the third acquisition in Massachusetts since Amedisys renewed its acquisition strategy in 2015.
Zacks Rank & Key Picks
Amedisys carries a Zacks Rank #5 (Strong Sell). Some better-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1(Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical surged 22.6% over the last one year compared with the S&P 500’s 11.9% growth over the same period. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 21.7% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%.
Bovie Medical recorded a 114.7% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>