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Amedisys (AMED) to Broaden Hospice Base With Asana Purchase

Zacks Equity Research

Amedisys, Inc., AMED recently entered into a definitive agreement to acquire Asana Hospice, a prominent hospice and palliative care provider in the United States. Financial terms of the deal were kept under wraps.

The company expects to close the deal on Jan 1, 2020 by dint of which it will get 100% ownership interests in Asana Hospice. 

Brief on Asana

Asana provides hospice care to approximately 540 patients daily across eight locations in Pennsylvania, Ohio, Missouri, Kansas and Texas. This hospice care provider addresses the physical, emotional, social and spiritual needs and offers high-quality end-of-life care.

Is the Purchase Strategic Fit?

With growing awareness about the benefits of hospice care, Amedisys is making significant efforts to expand its hospice care base. This acquisition of Asana will mark the third hospice care buyout for Amedisys in 2019. With the deal’s closure, the company will operate a total of 146 hospice care centers across 33 states.

This transaction is expected to pave the way for enhanced patient care, better support for clinical teams and more awareness of the hospice care benefits.

Market Prospects

Per Market Research Future, the global hospice care market is projected to witness a CAGR of 8.1 % during the 2018-2023 period. Considering its abundant market prospects, this acquisition is a strategic fit.

Other Hospice Takeovers of 2019

In April 2019, the company acquired RoseRock Healthcare, a prominent hospice care provider in Tulsa, OK.

In February, the company concluded the consolidation of New Jersey-based Compassionate Care Hospice, a 53-location national hospice care provider that added 11 states to the acquirer’s hospice network. This acquisition makes Amedisys the third largest hospice organization in the United States.

According to Amedisys, these additions in 2019 led to a combined average daily census of 3,500. This, in turn, widened Amedisys’ hospice network to 54 new sites in 12 new states. The company currently provides hospice services to nearly 12,000 patients daily.

Price Performance

Over the past year, Amedisys’ shares have outperformed its industry. The stock has soared 31.9% versus the industry’s decline of 1.9%.

Zacks Rank and Other Key Picks

Amedisys currently sports a Zacks Rank #1 (Strong Buy).Some other top-ranked stocks from the broader medical space are Haemonetics Corporation HAE, National Vision Holdings, Inc EYE and ResMed Inc RMD.

Haemonetics has a Zacks Rank of 1 and a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently has a Zacks Rank #2 (Buy).

ResMed’s long-term earnings growth rate is expected to be 12.9%. It currently carries a Zacks Rank of 2.

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