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Care Advantage, Inc. Grows with the Acquisition of Nova Home Health Care

Care Advantage, Inc., the largest privately owned home health company in the Atlantic Mid-South, completed the acquisition of Nova Home Health Care in Northern Virginia earlier today.

Nova Home Health Care will be the twentieth acquisition Care Advantage, Inc. (CAI) has completed since 2018, and the eighth since joining forces with Searchlight Capital Partners in 2021. Through this addition to its care family, Care Advantage, Inc. demonstrates its dedication to expanding the scope and breadth of care services on offer. Nova Home Health Care’s team of over 200 caregivers provides compassionate, innovative, and personalized care, and will only continue to grow in the Care Advantage family of brands.

Tim Hanold, CEO of Care Advantage, said, “Formalizing the union of Care Advantage and Nova Home Health Care has been something I have been looking forward to for quite some time. Even from our earliest conversations, it was very clear how important their clients are to them. The passion and enthusiasm they put into their care felt familiar and affirming tome and the CAI team. Adding Nova Home Health Care to our Care Family alongside legacy brands such as Capital City Nurses, Care Advantage, Youngs Home Health and National Home Health is extremely exciting.”

Ali Abdi, CEO of Nova Home Health Care, said, “This partnership with Care Advantage positions us with the tools and resources to take our service offering to the next level. Care Advantage’s culture feltlike a good fit from the beginning—we both bring the same type of care and compassion to the table. I know this is the right direction for Nova Home Health Care, and I can’t tell you how enthusiastic I am to see where this takes us.”

Samad Deef, CFO of Nova Home Health Care, added, “The thing I’m most excited about is the experience of Care Advantage. This is a company with a solid track record integrating companies like ours in northern Virginia. It was important to us to partner with a brand that knew how to handle mergers like this, and we have found that partner in Care Advantage. This team excites me because it represents the next step for Nova Home Health Care—a step we’re excited to take with all our clients.”

About Care Advantage

‍Care Advantage is the Atlantic Mid-South’s leading privately held home healthcare provider. The Company specializes in “one-on-one” quality nursing care in the home and is a one-stop shop for home healthcare services. Corporate headquarters are in Richmond, VA and there are 51 branch locations throughout Virginia, Maryland, Delaware, North Carolina, and Washington D.C. The Company provides a mix of Medicaid and self-pay nursing and personal care services such as bathing, dressing, and companionship and provides skilled services primarily by licensed nurses and therapists.

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This article was originally written by Patrick Filbin for Home Health Care News. To read the original article, click here.

The Future Leaders Awards program is brought to you in partnership with Homecare Homebase. The program is designed to recognize up-and-coming industry members who are shaping the next decade of home health, hospice care, senior housing, skilled nursing, and behavioral health. To see this year’s Future Leaders, visit https://futureleaders.agingmedia.com/.

Jaron Clay, the vice president of integrations at Care Advantage, has been named a 2023 Future Leader by Home Health Care News.

To become a Future Leader, an individual is nominated by their peers. The candidate must be a high-performing employee who is 40-years-old or younger, a passionate worker who knows how to put vision into action, and an advocate for seniors, and the committed professionals who ensure their well-being.

Clay sat down with HHCN to talk about the importance of caregiver satisfaction, educating communities on the accessibility to home care, the rising influence of value-based arrangements and more.

HHCN: What drew you to this industry?

Clay: Like so many other folks, I got into this with a strong desire to help other people. The first job I ever had in this industry was managing group homes for adults with intellectual disabilities. I got into that right at a time when the Commonwealth of Virginia was making a giant push to get individuals out of state-run institutional care and back into residences in the communities that they were from.

That was really such an exciting time to be doing that and it was really edifying to see the improvements that people would make just being at a home that they could call their own. There’s a sense of dignity that was given to them because of that. And for me, the light just went on. I saw the improvements people made and I was hooked. I’ve been an evangelist for care in the home ever since then, because I’ve really seen firsthand how it helps folks.

What’s your biggest lesson learned since starting to work in this industry?

I always need to ask myself and ask other leaders around me, whenever we’re making a decision, “How is this going to impact our caregivers?”

Every agency out there has their clients front and center, as they should be, but our caregivers play such an important part of our care ecosystem. It’s important to remember they have options. They can opt out of this. Our sick or elderly folks can’t just snap their fingers and decide not to be that one day, but our direct care professionals can decide that they want to go do something else. They have options.

I think it’s very important to think about how important the work is that our direct care professionals do, how hard it is, the sacrifices they make to make other families better. It’s almost philanthropic on their part.

I think it’s important to always acknowledge that and to ask ourselves when we’re making decisions, how is this going to impact our care professionals? Are the actions we’re making at the company showing up to be their champions — because the entire care delivery system doesn’t rest on executives, it rests on the labor of those folks.

If you could change one thing with an eye toward the future of home-based care, what would it be?

Lowering the barrier to entry to care and making the learning curve a little easier.

I serve on the board for the city of Richmond’s Office of Aging and Disability Services. Every time we have a meeting, it’s just staggering the reports of the number of people who call in, they need care, they need help, they’ve paid into programs their entire life and they have no idea what they’re entitled to. They have no idea what help is actually out there for them.

The approval process is very, very hard for many of our elderly folks to navigate on their own. And that’s just heartbreaking. I think we need to better educate our communities as to who we are as an industry and what sort of services they have and how they can access that because, for so many of these folks, care can’t wait 30 or 60 days while they try to figure this out on their own.

What do you foresee as being different about the industry looking ahead to 2024?

Especially in light of the CMS access rule, I think more and more providers are going to understand that value-based reimbursement has to be part of their solution set and their revenue stream. It’s going to be an important differentiator for themselves versus other organizations down the road.

I think that has the potential to be really, really good for our consumers. That additional scrutiny on the value that companies are providing. Are they really keeping their clients from rehospitalization? I think that’s going to really create a healthy competition among providers to be really, truly excellent at service delivery. If that is the case, then our consumers are definitely going to benefit from that.

In a word, how would you describe the future of home-based care?

I hope it’s growing. The company I work for and the other companies that I’m acquainted with, so many of us are at our bandwidth when it comes to the number of caregivers we have versus the number of people needing care. Over the next 10 or 15 years, particularly as the baby boomers continue to age, those needs are only going to go up.

So as an industry, we need to continue to grow to meet that need or we’re going to have a lot of folks who need care that isn’t available to them.

I also think we need to find new ways to encourage more people to move into caregiving. We have to be the advocates for adequate reimbursement so that caregiving is an appealing job that’s compensated at the level it should be. If we fail to do that, we’re going to miss out on an opportunity to help so many who are going to need care at some point down the road.

What quality do you believe all future leaders must possess?

I think that they have to possess the ability to be nimble and to not be beholden to the way home care was done 20 years ago.

The industry is changing every day. I’ve seen it in just my first decade in the industry. We’ve had to tear up our game plan and create new ones in response to that. Anyone who wants to be a leader in this industry has to be really willing to be adjustable and to be nimble and to try out new things.

And not be afraid to fail fast. Because that’s going to be the only way we come up with innovation and better care for our clients.

To learn more about the Future Leaders program, visit https://futureleaders.agingmedia.com/.

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We are very excited to announce that our CEO, Tim Hanold, has joined forces with the American Heart Association as a member of the Heart Challenge Executive Leadership Team. Tim will help bring the Association’s mission to Care Advantage as well as our local community. With this collaboration, we hope to support survivors, increase your physical and mental wellbeing, and have fun as a team.

 February is the American Heart Month, and the Association is shedding light on the importance of CPR. Here at Care Advantage, we hope you are motivated by this year’s theme “Be the Beat” and learn the two simple steps needed to save a life – call 911 and push hard and fast in the center of the chest. More than 350,000 out of hospital cardiac arrests occur each year with over 70% of them happening in homes. Which means that if you arec alled on to give CPR in an emergency, you will most likely be trying to save the life of someone you love: a coworker, spouse, parent, or friend.

February 3 is National Wear RED Day – wear your favorite red outfit and email or text us a picture of support to [email protected]. Post a selfie on social media using #RVAGoesRed and tag @Care_Advantage and @AmericanHeartVA.  

Save the date for CycleNation on May 25, 2023 and Heart Walk October 21, 2023!

Over the past few years, a number of home-based care companies have been able to achieve rapid, inorganic growth.

Due to these organizations’ acquisition prowess, their leaders have become experts in spotting deal landmines and goldmines.

On the home care side, Care Advantage Inc. has become one of these companies.

The Richmond, Virginia-based Care Advantage has 38 locations throughout Virginia, Maryland, Delaware, Washington, D.C. and North Carolina. It’s one of the largest in-home care companies in the Atlantic Mid-South region. Home health care is also one of the company’s offerings.

Since 2018, Care Advantage has completed 19 acquisitions, only slowing down in 2020 and early 2021 due to the pandemic. In 2022 alone, the company completed seven acquisitions.

Its most recent transaction took place in December. Only a week after its acquisition of Lighthouse Healthcare, the company purchased Care Perfections Health Services.

“It’s helping us further build out our coverage in that Northern Virginia area,” Care Advantage CEO Tim Hanold told Home Health Care News. “At this point, we essentially have a blanket coverage of the geography and population throughout Virginia, but … it provides that additional coverage for our payer partners and complements a number of our past – and newer – pay-for-performance programs, especially on the Medicaid side.”

Care Advantage’s status as a prolific acquirer has positioned Hanold to be able to tell when a deal is up to snuff.

When entering a deal, making sure it is a strategic match for the company’s long-term investment goals is top of mind.

“Does it create value for the organization as a whole?” Hanold said. “Obviously, economics needs to make sense, but at the end of the day, both parties need to feel good about the end result, and culture matters.”

Once a buyer decides to enter a deal, it’s paramount for it to have its funding in place — something that has recently become more challenging..

“They need to be able to fund that deal, especially now with the inflationary pressures in the market,” he said. “Whether that’s debt, or you’re working through your equity, you have to be set up for success well before you enter into these deals.”

Hanold also noted that the buyer should create a strong integration game plan.

“It’s not one size fits all,” he said. “There’s certainly templates to success, but also, there’s something bespoke about each deal.”

That game plan is also aided by transparency, which makes the first three months post-deal completion much more smooth.

“It’s important to be transparent and clear about expectations up front, whether that is on the transition [itself], back-office systems, reporting structures or your EMR and case management systems,” Hanold said. “What are those agreed upon synergies and what is that org chart going to look like? What is the agreed-upon timing for getting all those different components [up to speed]? Those first 90 days are really crucial to that ongoing success.”

And perhaps most importantly: forced deals are not goodones.

“While it’s really unfortunate when this happens — because of the cost of time, energy and resources — you should never feel like you need to force through a deal,” Hanold said. “Some signs that something is wrong are material issues, quality of earnings and significant compliance or quality assurance gaps when were doing that due diligence. Also, is there a disconnect between how the team presented culturally initially and in subsequent interactions throughout the rest of the process?”

Addus is opportunistic in M&A

Addus HomeCare Corporation (Nasdaq: ADUS) has also been busy on the M&A trail.

It delivers a variety of home-based care services including home health care, personal care and hospice. Currently, the company provides services to 45,500 consumers through 206 locations across 22 states.

In August, Addus stated that it expected to make larger deals in the back half of last year, as well as in 2023. The company has completed two acquisitions of note since. The most recent one involved the Chicago-based Apple Home Healthcare.

“It met our strategy of growing clinical services in an existing personal care and hospice services market,” Cliff Blessing, executive vice president and chief development officer at Addus, told HHCN.

For Addus, acquisitions will continue to be core to the company’s growth strategy.

“We really want to execute a strategy where we have all three service lines in every market that we serve,” Blessing said.

“We also want to be opportunistic, and add those service lines in strategic markets that we’re in today.”

In turn, being aggressive on the M&A front has taught the company many lessons.

“As a serial acquirer, Addus has a structured process ready to roll out upon execution of the letter of intent,” Blessing said.

“The letter of intent includes the transaction timeline, a due diligence request list, third-party advisory engagements, and internal departmental working groups, which are all pointed towards the goal of moving efficiently through the diligence process.”

Blessing noted that it’s important to move at a mutually workable pace for both buyer and seller.

As far as dealmaking red flags, one of the biggest is when buyer and seller expectations are no longer aligned.

“This can become evident when something is discovered in due diligence investigations, and there are different points of view on the risk associated with the feelings,” Blessing said.

“We try to avoid some of these potential landmines by asking key questions prior to submitting a letter of intent, and talking openly about the diligence process and expectations of the buyer.”

This is where having an experienced investment banker involved can also be helpful, according to Blessing.

Ultimately, when it comes to acquisitions, there are a few key attributes that Addus always wants to see in the seller.

“We like to see the ability to provide high-quality care, a capable management team and a strong history of growth,” Blessing said. “We also want to see financial performance continue to improve and be sustainable.”