Investing behind home care for seniors: Apax, WCAS-backed InnovAge’s public debut, CareFinders seeks PE partner

WCAS-backed InnovAge goes public and investors go bullish over home care for seniors. 

Happy Friday!

That was quick: It was only eight months ago that Apax Partners agreed to join Welsh, Carson, Anderson & Stowe as an equal investor in InnovAge. The deal valued the provider of PACE (Program of All-inclusive Care for the Elderly) at $950 million, I reported.

Thursday, InnovAge made its public debut, closing the day with a market cap of $3.22 billion and enterprise value of $3.45 billion – more than 3 times its value just months earlier.

InnovAge priced its shares above its anticipated range, raising about $350 million while shares popped more than 15 percent on their first day of trading.

Why all the love?
“InnovAge is indexed against an end market – the dual-eligible market – that is very powerful. At its core, it keeps Medicare and Medicaid eligible patients out of nursing homes. It keeps you aging in place in the home,” Scott Mackesy of WCAS told me in a Q&A late January.

Apax and WCAS will own a combined 87 percent of InnovAge’s common stock after the offering, according to an S-1 filing. The firms were set to each hold 49 percent stakes when Apax joined as an investor in July, I wrote. For WCAS, the 2020 recap was done at over 6x its money, Mackesy told me previously. Let it rain!

Coincidentally, we’ve got another scoop today centered around the growth of home care.
CareFinders, a fast-growing non-medical home care company in the Northeast, is working with Moelis on a process seeking a growth investment, according to three people with knowledge of the matter. The company has executed more than 25 acquisitions over the last five years and could fetch a valuation into the upper $400-million range, sources said.

Read more on CareFinders here.

Activity like CareFinders and InnovAge comes as covid-19 has only accelerated the trend of more individuals being discharged from hospitals directly to their homes for further rehabilitation.

According to a recent 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, the report said. 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.

That’s it for today! Have a great weekend, everybody, and as always, hit me up with any tips or feedback at springle@buyoutsinsider.com.