CareFinders Total Care, a fast-growing non-medical home care company in the Northeast, is looking for a growth investment to fuel its momentum, according to three people with knowledge of the process.
A tight process targeting a private equity deal is underway and could stretch into summer, some of the people said.
The sources added that Moelis is providing financial advice to the company.
The process is expected to produce an 11x to 13x multiple of the company’s more than $35 million in EBITDA, sources said, suggesting a deal could be valued at more than $450 million.
Headquartered in New Jersey, CareFinders states that it is the largest and fastest-growing non-medical home care company in the Northeast. Growth has been fueled with an aggressive M&A strategy, the company having executed more than 25 acquisitions over the last five years.
According to its website, CareFinders has 19 locations in the Garden State and serves 19 of its 21 counties, with more than 7,600 trained caregivers and skilled nurses assisting more than 8,000 patients. CareFinders is focused on providing personal care services ranging from companionship to medication assistance or help with laundry and grocery shopping. A smaller piece of the business provides private duty nursing and home help for specialty health services.
The company, purchased in 2014 by co-chairman Linda Mintz and Sandy Hausner, brought on longtime industry exec Jim Robinson in 2018 to lead the company as CEO.
An experienced dealmaker and former executive of public home-health business Amedisys, Robinson from 2015 to 2018 led the turnaround and growth of National Spine & Pain Centers through Sentinel Capital Partners’ sale of the business to Avista Capital Partners.
The process for CareFinders comes as the broader home care industry – both medical and non-medical – continues to see robust interest from private equity.
People have long preferred to grow old at home rather than in a skilled nursing facility. Covid-19 has only accelerated this trend as more individuals are being discharged from hospitals directly to their homes for further rehabilitation.
According to a Wall Street Journal analysis of federal data, occupancy in US nursing homes in December 2020 was down 15 percent, or more than 195,000 residents, since the end of 2019. The trend was driven both by residents’ deaths and by a fall in new admissions.
Although nursing homes and home-health companies both shed jobs at the start of the pandemic, only home health is bouncing back, the WSJ found. The report found that the shift in referral patterns to home health providers was viewed as long-lasting.
Non-clinical or unskilled home care also has a more favorable labor pool.
A big inhibitor of growth across many skilled-healthcare services is the supply-demand imbalance, our sources explained. For instance, although many private equity firms have flocked to back providers of autism disorder treatment as diagnosis rates continue to rise, the sector faces a shortage of therapists and of certified providers of applied behavioral analysis.
The overall employment of home health aides and personal care aides is projected to grow 34 percent from 2019 to 2029, much faster than the average for all occupations, according to the US Bureau of Labor Statistics.
The process for CareFinders also comes on the heels of notable activity in non-medical homecare.
Centerbridge Partners and Vistria Group in September clinched an approximately $1.4 billion deal for Help at Home, valuing the business at about 12x EBITDA. Wellspring Capital rolled equity in the deal.
Later that month, Providence Service Corp bought Simplura Health Group from One Equity Partners for an enterprise value of $575 million. The deal equated to approximately 11.5x Simplura’s adjusted LTM EBITDA as of June 30, 2020.
The latter is an example of the blurring of strategies involving an across-the-home care setting. Providence – parent of non-emergency medical transportation company LogistiCare – got into the non-medical home care space through Simplura.
More recently, KKR-backed BrightSpring Health Services – historically known for its non-medical home care and pharmacy businesses – clinched a $775 million deal for Summit Partners‘ Abode Healthcare in a bid to substantially build out its home health and hospice business, PE Hub wrote.
Moelis declined to comment. Company executives did not return requests for comment.