LHC Group announced Sept. 3 that it is buying Halcyon Hospice of Cumming, Ga., for approximately $58.5 million in cash. On the same day, the local company confirmed that it has acquired a home health and hospice provider in Louisiana and a home health provider in Arkansas. The annual combined revenue for the two smaller transactions is $3.8 million.
Halcyon was founded in 2010 by Dan Kohl and Jack Draughon with a private equity partner. It is one of the largest independent providers of hospice services in the southeastern U.S., operating 16 hospice locations across three states, including two inpatient hospice facilities, and has approximately 400 employees. Halcyon’s service area covers 183 counties across Georgia, Mississippi and South Carolina, including 59 counties in which LHC is licensed for home health. Annual revenue for Halcyon is approximately $41 million. Upon completion, this acquisition will increase LHC’s hospice service line to 53 locations in 12 states with more than $110 million in annual revenue.
According to the press release, the acquisition is anticipated to be dilutive to LHC Group’s fourth quarter 2015 earnings per share by approximately $0.06 due to transaction and integration costs, but accretive to LHC Group’s 2016 earnings by between $0.15 and $0.20 per diluted share. LHC Group is raising its full year 2015 guidance for net service revenue to a new range of $800 million to $815 million from the previous range of $780 million to $795 million and is reaffirming its 2015 fully diluted earnings per share in the range of $1.70 to $1.80 to incorporate the impact from this transaction.
“Two of our stated strategic objectives are to grow our hospice operations into new geographical markets and to expand our hospice footprint in specific markets where we have home health operations,” said Keith G. Myers, LHC Group’s chairman and CEO, in the press release. “Halcyon’s expertise and service area complement LHC’s extensive home health market presence in the Southeast. ... When we combine the Halcyon operations with our current LHC hospice operations, we are confident we will not only have one of the largest hospice platforms in the country, but also one of the industry leaders in care and service.”