Addus HomeCare to sell NY operations to HCS-Girling for ‘up to’ $23M

Addus HomeCare announced a definitive agreement to sell the company’s New York operations to HCS-Girling. Based in Brooklyn, New York, HCS-Girling is a leading provider of home health and home care services. The operations being sold consist of all of the Company’s personal care operations in the state of New York, including fiscal intermediary services under the New York Consumer Directed Personal Assistance Program or CDPAP . The timing for the closing of the transaction is subject to customary regulatory approvals. The purchase price for the transaction will be up to $23.M depending, in part, on future operating requirements for HCS-Girling in New York. The Company will use the proceeds from the transaction to reduce the outstanding balance on its revolving credit facility. Commenting on the announcement, Dirk Allison, Chairman and Chief Executive Officer, stated, “We are pleased to reach this agreement with HCS-Girling to divest our New York personal care operations and exit the state. This has been a challenging market for Addus and no longer fits our growth strategy. We do not have the opportunity to offer all three levels of home care services there, and the well documented program challenges and start-and-stop changes in the state’s approach have consumed a disproportionate amount of management resources for limited financial contribution. We expect exiting New York will be immaterial to our consolidated earnings and will lead to a modest expansion in our margin profile. We believe we can have a greater impact for both our clients and our shareholders by focusing on and growing other more strategic markets. HCS-Girling has a solid reputation for personalized, professional care for customers in their own homes, and we are confident that our customers in the New York market area will continue to receive excellent care.”