Embracing HospiceCare, Inc. (“EHC”) was the second largest and fastest growing hospice in the Atlanta area. The company provides terminally ill patients the highest quality of care using a staffing model that has resulted in profits every month since inception. The company is certified to serve both Medicare and Medicaid patients. The long-term planning and budgeting processes are facilitated by the prevailing per-diem reimbursement structure. Approximately 95% of the company’s revenues are reimbursements from Medicare and Medicaid.
Applied Economics was engaged as the exclusive financial advisor to EHC initiating negotiations and structuring the transaction. After communicating with numerous financial and strategic buyers, American Hospice surfaced as the lead interested buyer. With a single interested buyer, Applied Economics had minimal negotiating leverage. However, during the course of the negotiations, we were able to increase the final sale price for the company by over 50% from the initial offer, and close the transaction successfully with a well-recognized institutional private equity firm.