In its first major deal of 2024, hospice services firm and Chemed subsidiary VITAS Healthcare moved to acquire all of Covenant Health and Community Services’ hospice operations for an aggregate price of $85 million.
The purchase, which is slated to close in the second quarter of 2024, would include all of Covenant’s hospice operations and one assisted living community, VITAS disclosed in a Tuesday statement. Covenant currently owns hospices in Crestview, Fort Walton Beach, Marianna, Panama City, Pensacola and Tallahassee, FL, and Daphne, Dothan and Mobile, AL. VITAS’ acquisition would expand its reach in Florida and mark its first entrance into Alabama.
“Covenant Care has a 44-year history of providing high-quality, patient-centered care across communities in Florida and Alabama,” Nick Westfall, chairman and chief executive officer of VITAS, said in a statement. “Being a similar long-standing, mission-focused provider, VITAS is looking forward to building upon their legacy.”
Jim Mislevy, president and chief executive officer of Covenant, said the deal signals “a monumental day” for the organization. Covenant had been searching for a strategic partner after several years of growth, he noted, and the provider’s board of directors unanimously chose VITAS for the transaction.
“It was evident from the beginning that both our organizations shared an aligned culture, mission, and passion,” Mislevy said in a statement. “It allows the organization to broaden and deepen its focus on improving healthcare for the communities we serve by supporting new solutions and filling gaps in the care delivery system, while at the same time, keep our promise to the communities by continuing to deliver the world-class hospice and palliative care they deserve.”
VITAS has enjoyed steady sequential and year-over-year earnings growth in recent fiscal quarters. During the fourth quarter 2023, the provider’s profits jumped 88% on revenues, which rose by more than 13%. Westfall credited VITAS’ achievement to its strong average daily census growth and a successful employee retention program that ended in 2023.
