NY Home Healthcare Deal

May 13, 2021

by a searcher from Northwestern University - Kellogg School of Management in New York, NY, USA

All - I've been curating a home healthcare deal in NY. Its $40M in revenues and $3-4M of EBITDA. All Medicaid and with healthy payor contracts. Lots of asymmetric upside potential that I can elaborate on, including potential for acquisitions to expand geographic coverage or add service areas (private duty, skilled, hospice, etc.). We have an IOI that was accepted for $18M, of which $14M will be upfront. We've conducted some pre-diligence and are assessing whether to move fwd. There are unique shareholder dynamics and license transfer protocols that may be require a quick deal, so may not work for a traditional senior debt+mezz+equity structure. I'd love to know if there are investors familiar with the space and can move quickly with an equity deal knowing there will be an opportunity for a debt and/or dividend recap in a year. If so, please reach out/DM.

Reply by a searcher
from The University of Tampa in Chicago, IL, USA

Sounds like an interesting opportunity, and assuming buying for growth angles. How many payors does NY contract with for Medicaid? How much will expanding service lines require increased overhead and revenue cycle skill sets to deal with a greater variety of payors? How much in physical plant will the expanded service lines require? Last, what are the demographics like for the particular region of upstate NY? Good luck!

Reply by an intermediary
from Indiana University at Bloomington in Carmel, IN, USA

NY Medicaid transfers are not fun. New applications take###-###-#### months according to the agency and acquisitions they will expiate it. The stock deal I did a few years ago took 13 months after the purchase agreement was signed, not the LOI. And the owner had a heart attack during that time, thank goodness he didn’t die!
so it will not be fast. Ping me if you need any info.

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