Aveanna Details Big Plans for Home Health M&A in First Official Earnings Call


Contemporary off of its market debut final month, Aveanna Healthcare Holdings, Inc. (Nasdaq: AVAH) is throwing its weight behind house well being.

Since going public, the corporate has made strikes to place itself as a significant participant inside the house well being house.

Aveanna plans to aggressively pursue house well being M&A alternatives, Rod Windley, government chairman of the corporate stated Wednesday throughout its first official earnings name.

“We plan to focus our M&A efforts on this section on conventional house well being,” he stated. “That will or might not comprise hospice, however we imagine the probability of us buying a standalone hospice right now is considerably low.”

Basically, Aveanna has already been busy on the M&A entrance. The corporate accomplished a minimum of 5 acquisitions in 2020, together with its buy of Get better Well being for about $61 million. Aveanna additionally acquired house well being supplier 5 Factors Healthcare in October for $64.4 million.

“Each 5 Factors and Get better Well being integrations are considerably full,” Jeff Shaner, chief working officer of Aveanna, stated. “Each groups are actually part of the Aveanna household, and the companies are trending forward of our expectations.”

As a strategic transfer, Aveanna’s deal with house well being over hospice is smart for the corporate. Windley famous that 95% of income from the mixed section was derived from Aveanna’s house well being enterprise.

Traditionally, Atlanta-based Aveanna has specialised in caring for advanced pediatric sufferers — with Epic Well being Providers and PSA Healthcare beneath its umbrella. Nonetheless, its buy of 5 Factors Healthcare has positioned the corporate within the home-based senior care house.

At this time, Aveanna employs greater than 42,000 caregivers who serve over 60,000 sufferers. The corporate supplies house well being and hospice providers by way of 65 places throughout 13 states.

Through the name, Aveanna leaders additionally gave insights on how having a various payer combine has helped give the corporate a aggressive edge.

“We imagine this payer variety advantages Aveanna in two methods,” Windley stated. “One, it offers us draw back safety from a major change or discount from a single fee supply. [Additionally,] it has offered us with a [days sales outstanding] that runs from the excessive 30s to the low 40s, which is constantly decrease than the trade comparables.”

General, conventional Medicare makes up roughly 9% of Aveanna’s revenues. Many of the firm’s income comes from Medicaid and Medicaid-managed care.

Aveanna operates beneath 36 totally different Medicaid fee programs and over 200 separate MCO contracts. Plus, non-public responsibility providers make up greater than 6% of the corporate’s whole revenues.

Monetary outcomes

Aveanna reported revenues of $417.2 million for the primary quarter of 2021, a 17.4% improve in comparison with $355.2 million for the primary quarter of 2020.

Aveanna’s non-public responsibility providers section reported $350.8 million, a 9.5% improve from $30.3 million in Q1 2020.

“Our [private duty services] affected person profile is such that our relationship with our affected person lasts a really very long time,” Shaner stated. “On common our [private duty] size of keep is roughly 5 years. This relationship has created a secure income and gross margin profile for our [private duty services] section.”

The corporate’s house well being and hospice section introduced in $31.5 million, an roughly 16% improve from $27.0 million in Q1 2020.

Shaner famous that the house well being and hospice section income was pushed by 5,800 whole admissions — with roughly 66% being episodic admissions.

“House well being and hospice is presently our quickest rising enterprise section,” he stated. “This fast and accelerated development has been some extent of emphasis for us as we work to increase our nationwide house well being presence.”


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