The Pennant Group (Nasdaq: PNTG) has agreed to acquire assets of certain affiliates of Signature Healthcare at Home for a combined price tag of $80 million.
“This is a significant acquisition in Pennant’s history,” Pennant CEO Brent Guerisoli said in a press statement. “We are excited to make this investment because of the quality of Signature’s people and operations. Its locations, its philosophy, and its culture are a perfect complement to our existing operations in the Pacific Northwest. A key tenet of Pennant’s disciplined growth strategy is that we make acquisitions from a foundation of strength, where we have solid existing leaders and well-performing operations.”
Signature provides home health and hospice services in the Pacific Northwest, and has locations throughout Oregon, Washington and Idaho. The company has more than 650 home health and hospice staff members.
The deal allows Pennant to continue to increase its presence in Washington and Idaho. It also will add seven additional locations to Pennant’s Oregon footprint.
On its end, Eagle, Idaho-based Pennant is a holding company of independent operating subsidiaries located across the U.S., with a network that includes 115 home health and hospice agencies and 54 senior living communities.
Overall, Signature rakes in annual revenue of $78 million.
Additionally, Signature home health admissions checks in at over 12,000. The company has an average daily hospice census of more than 300.
“The deal should contribute an incremental +13% of revenue, +25% home health admissions, and +3% hospice ADC,” an analyst note from Stephens read.
The acquisition agreement includes two separate transactions — the sale of Signature’s Washington and Idaho assets and the sale of its Oregon assets. The former is slated to close on Aug. 1, 2024, while the latter is expected to close Jan. 1, 2025.
“We have known Signature and its leaders for years, including through the acquisition of their Northern Utah and Eastern Idaho locations several years ago,” John Gochnour, president and COO of Pennant, said in the press statement. “We have great respect for the talented team they have built and its impact on many communities across Oregon and Washington that we don’t currently serve. As we transition these operations into the Pennant fold, we are pleased to deepen our presence in these key states and to provide Signature’s leaders and staff the opportunity to benefit from our innovative operating model and leadership development programs, while also implementing clinical and operational best practices that will benefit patients and their communities.”
Gochnour noted that Pennant will remain bullish when it comes to M&A. In terms of potential acquisition targets, the company plans to go after strategic and underperforming home health, hospice and senior living operations of all sizes.
Most recently, Pennant developed a partnership with Hartford HealthCare at Home, the home health and hospice arm of Hartford HealthCare. The company will offer management and consulting services as part of the partnership. That deal took Pennant into the East Coast for the first time.
In May, Pennant announced that it acquired the Davis County, Utah-based South Davis Home Health and South Davis Hospice. The move allowed Pennant to expand in Utah.
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