M&A Healthcare Advisors is pleased to present a CDPH licensed, JCAHO accredited, Medicare and Medicaid certified hospice and home health agency with multiple office locations across three (3) adjacent counties within California. From 2019 through expected year end 2022, the company’s revenue has a compounded annual growth rate (CAGR) of 6.9% and an EBITDA CAGR of 17.8%.
In 2021, the Company generated over $26 million in revenue with an adjusted EBITDA margin of $3.5 million (13%). They also conducted over 65,000 home health patient visits, 56,000 of which were traditional Medicare reimbursement, while 9,462 were from Managed Care (MCOs) or Medicare Advantage. Moving forward, our client expects that MCO patients will continue to grow. There is no ADR liability for home health, nor is there any risk of exceeding the aggregate Cap limits for Hospice. In 2021, only 27.5% of total hospice patients (98 of 454) were discharged over 180 days keeping the Length of Stay well below the national average of 44.1% discharges over 180 days.
In 2022, the company is expected to generate approximately $31.9 million in revenue with an adjusted EBITDA margin of $6.3 million (20%). The 22.6% growth rate in revenue from 2021 to 2022 is due to an increase in hospice and home health census across all locations. One of the main growth factors contributing to the 20% Company profit margin is hospice revenue increasing by $3.7 million, representing significantly more profitable patients per reimbursement dollars compared to home health patients. Gross revenues in 2022 are split evenly between hospice operations, generating $16.4 million, and home health operations, generating $15.5 million, which also includes a small portion of home care services. The Average Daily Census (ADC) for home health patients has grown from 505 in 2019 to 632 in year-to-date (YTD) July 2022. All service counties have had hospice patient increases with the total ADC growing from 154 in 2019 up to 207 patients in 2022 YTD.
Our client is interested in selling all or a majority of their interest and is willing to stay involved in operations in a more limited capacity. For more information and next steps, please sign our Non-Disclosure Agreement.