The Pennant Group, Inc. (NASDAQ: PNTG) has acquired Utah-based South Davis Home Health and South Davis Hospice.
The Pennant Group and its independent operating subsidiaries provide health care services through 111 home health and hospice agencies and 51 senior living communities throughout several states.
“This acquisition provides us with an opportunity to further expand in the state of Utah, and will complement our agencies throughout central and northern Utah,” said Pennant CEO Brent Guerisol in a statement. “We continue to be the provider of choice in these communities, and this opportunity expands our ability to provide life-changing hospice services to residents of Davis County and its surrounding communities.”
Seniors represent 12.1% of Utah’s population, one of the lowest rates in the nation according to the state’s Public Health Indicator-Based Information system. In 2021, about 14,000 Medicare graduates enrolled in hospice, the US Centers for Medicare & Medicaid Services (CMS) reported.
Historically, Pennant has focused on underperforming M&A targets with high turnaround upside. The company has also targeted operations in more rural areas. Pennant acquired Southwestern Palliative Care & Hospice in December. Prior to that, it completed hospice-related deals in Texas and Oklahoma, too.
The Pennant Group’s total revenue for the full-year 2023 was $544.9 million, an increase of $71.7 million, or 15.1%, over the previous year. For the fourth quarter, Pennant’s revenue was $146.0 million, an increase of $21.3 million, or 17.1%, over the previous year’s same period.
The company’s home health and hospice services segment revenue for all of 2023 was $394.5 million, an increase of $52.2 million, or 15.3%, over the previous year. Q4 revenue was $106.9 million, an increase of $16.2 million, or 17.9%, over the previous year’s same period.
More acquisitions are likely as the year goes on.
“We remain focused on our disciplined strategy of acquiring operations at attractive valuations in locations where we have strong peer operating clusters and talented leaders ready to drive results,” President and COO John Gochnour said in a recent earnings call.