LHC Group, Inc. (LHCG) has inked a deal to acquire Heart of Hospice from EPI Group, LLC. LHC Group provides in-home healthcare services and innovations for communities in the U.S.
The financial terms of the deal have been kept under wraps. Shares of the company were down 1.9% to close at $192.26 on June 2.
Through the acquisition, LHC Group will add 16 hospice agencies. The newly-added agencies will expand the company’s hospice footprint in 5 states, Arkansas, Louisiana, Mississippi, Oklahoma, and South Carolina.
The acquisition is expected to close during the third quarter of 2021, subject to certain regulatory conditions. (See LHC Group stock analysis on TipRanks)
LHC Group has forecast annualized revenues of $92.5 million resulting from the deal, but it is not expected to have any significant impact on earnings in 2021.
On May 5, Oppenheimer analyst Michael Wiederhorn reiterated a Buy rating and a price target of $250 (30% upside potential) on the stock.
Wiederhorn said, “We favor home health due to its promising growth, led by a shift from the institutional setting into the home. Furthermore, we believe the larger providers will lead a consolidation of this fragmented industry, especially as reimbursement rates become tighter and reimbursement systems become more complex. To that point, the company’s acquisition of Almost Family offers significant opportunities for cost savings but maintains its strong balance sheet profile.”
Overall, the stock has a Strong Buy consensus rating based on 4 unanimous Buys. The average analyst price target of $252.50 implies 31.3% upside potential from current levels. Shares of LHCG have jumped 17% over the past year.
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