The Pennant Group (NASDAQ: PNTG) plans to be an lively acquirer throughout 2021 with an emphasis on hospice and residential well being targets. The hospice, dwelling well being and senior residing supplier elevated its revolving line of credit score by $75 million to a complete $150 million this week, pledging to use these assets to purchasing new operations.
Whereas pursuing offers, the corporate additionally noticed substantial natural development within the fourth quarter of 2020. Pennant’s common every day hospice census reached 2,308, up greater than 25% from the prior yr’s interval. For the complete yr, census rose to 2,083, a 24% improve from 2019.
Pennant plans to speculate its M&A {dollars} into dwelling well being and hospice quite than its senior residing enterprise in the meanwhile, largely resulting from headwinds related to the pandemic.
“We’ve deployed a big quantity of capital opportunistically within the dwelling well being and hospice section, and our capability to deploy much more continues to extend,” stated Pennant CEO Daniel Walker in an earnings convention name. “This robust momentum in our dwelling well being, and hospice enterprise lays the inspiration for our continued year-over-year development.”
Pennant accomplished a number of transactions in the course of the second half of 2020. Final October introduced the acquisition of Harmony Hospice in Las Vegas, which had been affiliated with two other hospices that Pennant had bought: Prime Hospice, positioned close to Phoenix, and Concord Hospice of Arizona. Monetary phrases of those offers have been undisclosed.
In July, Pennant additionally acquired hospice and residential well being property of Signature Well being Care at Residence for an undisclosed sum, every with a number of places all through southeastern Idaho and northern Utah. Pennant additionally accomplished plenty of dwelling well being acquisitions.
The corporate final November introduced the launch of two start-ups, one in Washington state and one in California.
“Our funding in these operations replicate the numerous methods wherein we will develop via our disciplined deployment of capital and management expertise,” Derek Bunker, Pennant’s chief funding officer, stated. “We prolong it strategically inside present geographies and into adjoining markets. We expanded the continuum by including dwelling well being companies the place we’ve a hospice company and vice versa.”
Pennant, which owns and operates hospice supplier Cornerstone Healthcare, was spun in 2019 off from The Ensign Group (NASDAQ: ENSG). Pennant retained Ensign’s hospice, dwelling well being and senior residing operations.
Pennant’s dwelling well being and hospice companies section introduced in $253.7 million throughout 2020, up 22% from 2019. For the fourth quarter of final yr, section income topped $74.5 million, a 35% enhance from the identical interval in 2019. The section’s full-year adjusted EBITDAR from operations reached $49.5 million, a 48% rise from 2019.
Pennant operates 65 dwelling well being and hospice companies, 51 senior residing operations, and cell diagnostics and lab operations positioned throughout 14 states, with 23 of the senior residing property topic to leases with third-party landlords, in addition to cell diagnostic companies and medical laboratory operations. Pennant additionally manages 28 senior residing communities pursuant to new, long-term triple-net leases with Ensign subsidiaries.
“Our historic monitor report of acquisitions is an effective indicator of our possible future development price, our capability to execute the next quantity, and bigger, extra advanced transactions will increase as our working markets mature,” Bunker stated. “Our entry to capital and a positive M&A panorama mixed to symbolize an thrilling interval of development, significantly within the dwelling well being, hospice and residential care areas.”
