Home health and hospice provider Amedisys Inc. (Nasdaq: AMED) late Wednesday announced plans to acquire SNF-at-home company Contessa Health for $250 million.
The Baton Rouge, La. company said it intends to grow Contessa’s logistics platform CareConvergence, in addition to owning its hospital-at-home and home-based skilled nursing services.
Amedisys’s total addressable market (TAM) for in-home care services will increase from $44 billion to $73 billion once the transaction closes later this summer. The provider expects to use a combination of cash and revolving credit facility for the acquisition.
“[The proposed acquisition] differentiates Amedisys as the first national home health provider to move into the tech-enabled, hospital-at-home and SNF-at-home space in a meaningful way with the ability to scale across a large geographic footprint,” Paul Kusserow, CEO and chairman of Amedisys, said in an evening investor conference call on Wednesday.
Contessa, headquartered in Nashville, Tenn., will operate as a wholly-owned subsidiary of Amedisys. The provider has health system joint ventures and payor partnerships in six states with organizations like Mount Sinai Health System, Marshfield Clinic Health System, Ascension Saint Thomas, CommonSpirit Health and Highmark Health.
Potential expansion is expected across an additional 28 states.
“We launched Contessa with the ambitious vision of creating innovative models that would allow as many patients as possible to receive higher-acuity care in their preferred setting – the home,” Travis Messina, founder and CEO of Contessa, said in a statement. “We wanted a partner with a national footprint, a reputation for outstanding clinical quality, and the scale and infrastructure available to accelerate our trajectory.”
Messina said the company was looking for a good opportunity to further grow services since its founding in 2015; Amedisys’s connections to hospitals and physicians, an “industry-leading clinical workforce” and positive reputation helped solidify the decision.
“While Amedisys continues to be a national leader in quality home health and hospice services, we have always worked to innovate and provide even more types of care in the home, as patients increasingly seek to ‘age in place’ in environments that are familiar and safe,” Kusserow said in the same statement. “Bringing the Contessa team into our family significantly advances this strategy.”
Amedisys partners with more than 2,900 hospitals and 78,000 physicians on a national level with a focus on home health, hospice and personal care.
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