Optum, the healthcare technology and services arm of UnitedHealth Group, has announced its intent to acquire LHC Group, a leading provider of home health and hospice services, for $170 per share. The deal values LHCG's equity at approximately $5.4 billion, implying an enterprise value of $6.05 billion including net debt of approximately $650 million. The deal implies a multiple of 20.8x estimated 2022 EBITDA of $291 million according to the fairness opinion prepared in support of the transaction.
Home Health and Hospice EBITDA Multiples
The deal implies a multiple of 20.8x estimated 2022 EBITDA of $291 million according to the fairness opinion prepared in support of the transaction. The EBITDA multiple is the second highest we have on record in the home-based services segment, likely due LHCG's high growth and strategy of focusing its development efforts on joint ventures with health systems. LHC management was projecting a 5-year EBITDA CAGR of 17.4% ($291m estimated 2022 to $593 by 2026). Eliminating the impact of M&A on EBITDA growth, LHC management was projecting a 12.2% 5-year CAGR.
LHC Group's Merger with Almost Family
LHCG merged with Almost Family in a deal announced in late 2017. That transaction implied a 15.5x multiple of estimated 2017 EBITDA for LHCG and a 14.3x multiple for Almost Family.
Other Home Health and Hospice Deals with High EBITDA Multiples
The other home health and hospice deals in the top 5 in terms of EBITDA multiple paid include the following:
Addus HomeCare's 2020 acquisition of Queen City Hospice
Aveanna's 2022 acquisition of Comfort Care
BrightSpring's 2021 acquisition of Abode Healthcare
HIG Capital's 2020 acquisition of St. Croix Hospice
About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 169 home-based services deals going back to 2010, 113 of which include reported EBITDA multiples. The home health and hospice databases can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about your specific situation.