Oppenheimer analyst Michael Wiederhorn notes that Addus announced an agreement to acquire Tennessee Quality Care for $106M. Assuming upper teens EBITDA margins and a $15M-$16M tax benefit, the deal equates to about 10-11-times EBITDA and would be 7c accretive to annual EPS. The transaction is expected to close during Q3 2023. Overall, the deal offers an attractive strategic profile, as Addus remains one of the few providers leveraging the attractive M&A market across its fragmented business lines, Oppenheimer contends. Despite the reimbursement overhangs on HH and PC, the firm continues to favor Addus at 12-times 2024 EBITDA. Oppenheimer has an Outperform rating on Addus with a price target of $118.
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