Addus HomeCare Corp. 2026 Jefferies Healthcare Services and Technology Conference

Yeah, Brian. I think, we had obviously been indicating to people that we had some maybe opportunities on some larger kind of Gentiva-sized assets that were going to come to market, and this obviously was one of those. I'm pretty excited to get this deal announced and out there, and obviously now going to be working toward close. But really nice addition for us. 10 states overall, but really big concentration in Texas, some in Illinois, some in California, and some in Arizona is probably 90%-plus of the overall business. Should be a nice overlay into our business. Gives us good concentration in those markets for what we thought was a pretty reasonable price as well. Pretty excited about this opportunity.

Yeah, it's very similar to the transaction we completed, I guess, a couple of years ago, the Gentiva transaction, where it's the personal care division out of a larger home health hospice platform. Not a lot of back office came with it, although within the division, there is a fair amount of support for the personal care. It'll be an interesting integration. It's good that we've done one already very similar to that. In fact, the Gentiva one was probably even more challenging just because we had a tighter timeframe to switch over for payroll systems. It was kind of interesting to have to cut 15,000 checks almost day one. This one actually, I think we have a little more favorable timeframe. Got a really good integration team. We've been working through due diligence and at the same time putting together plans.

Good open communication with the AccentCare team. We will have the system conversions for the billing side and the scheduling side. We have the payroll, the front office. Certainly, there will be some opportunities as we go through that process to get some synergies, because there is some overlap in operations.

Yeah, I think the way to think about this, $280 million in revenue kind of run rate. I think our expectation is gross margin should be similar profile to our PCS business, so think upper 20% range. There is probably, as Brad indicated on the SG&A side, there is probably some efficiencies that we will need to gain here. Their EBITDA, right now or out of the gate, is probably going to be just under sub 10%. We will have some opportunity, we think, to bring that up to our normal level of our PCS division. That will probably take us, we think, 12 to 18 months to fully realize those synergies, but we will probably start to get some of those fairly quickly. It will not be kind of a cliff situation.

We are on a couple of EMRs today on the billing side that we actually use, so our teams are familiar with them. We will ultimately obviously convert them over to Homecare Homebase like the rest of our business. They will probably go kind of the end of our conversion schedule. We are going through our conversion internally now. That will probably happen toward the end of 2027, early 2028. Just from a timing perspective, we think this probably closes at the earliest Q1 of 2027, pending regulatory approvals. We will go through that. I do not have any concerns on an antitrust basis right now. That is the way to think about the financial profile.

Yeah, I think as Brian alluded to, we are familiar with the systems that they are on currently. We will keep them on those systems until, pace it with our Homecare Homebase rollout. They will probably be more on the back end because Texas is kind of scheduled for the back end for us. We have got the ability to pace that. But from a clinician standpoint, I think good news is with the Homecare Homebase rollout that we are doing, we are learning a lot in that process. We have got the training resources. By the time we are getting around to the AccentCare assets, we will have the super users in place. I think we will be able to manage that process very well.

Yeah, on the PCS side, I think obviously, we've done, I think, really well in our efforts to increase our fill rate, so basically the number of hours that we serve to the authorized hours. So we've gotten that up between 84% and 85% in Q2 as we talked about. Some efforts that we've done through our caregiver app and other things we're doing out in the field to make sure we're taking advantage of all the hours that have been authorized to us and being as efficient as we possibly can, I think has definitely helped on just the hourly growth side. We have talked about trying to target between 2% and 2.5% hours growth year-over-year on a same store basis. That's kind of our target range. We've been squarely in that range for the last several quarters. I think that's been part of it.

Another focus of ours has obviously been on just pure census as well, and we've seen some sequential gains there through this year, so that's been helpful. We're still actually getting some contribution from some rate support. So the Illinois rate increase that kicked in January 1st of this year. We got Texas in the last cycle as well. We got a New Mexico increase that'll help us a little bit in the back half of this year. But that's all been helpful to keep us above the high end of that 3% to 5% target range that we typically have talked about. We anticipate we'll probably be toward the top end of that with New Mexico rate increase through the end of this year. Then we get into next year, we're not going to get an Illinois rate increase next year.