One Equity Partners (OEP), a middle market private equity firm, is to sell Simplura Health Group (Simplura), a provider of high-quality home care services for the elderly and disabled, to Providence Service Corporation (: PRSC).
Through its subsidiary, Logisticare, Providence Service Corporation is the nation’s largest manager of non-emergency medical transportation programmess.
The sale of Simplura will result in the successful realisation of OEP’s 2016 investment in the market-leading provider of non-medical home care services. Headquartered in Valley Stream, New York, the Company employs over 15,000 professionals, including 14,300 direct caregivers from a network of 57 locations in seven states – New York, Pennsylvania, Massachusetts, Connecticut, West Virginia, Florida and New Jersey.
“We’re proud that our partnership with Simplura’s President and CEO David Middleton and his results-driven team has built a leading national brand in home care with a strong focus on providing best-in-class care,” says Greg Belinfanti, Senior Managing Director at One Equity Partners. “We’re pleased to transition ownership in Simplura’s highly scalable platform in a transaction that will allow us to realise significant value for our investors and position the Company for the next chapter of its growth.”
Under OEP’s ownership, Simplura executed eight add-on acquisitions that grew the Company to 57 locations across seven states, adding operations in Massachusetts, Pennsylvania, Connecticut and West Virginia, which are all attractive Medicaid Home and Community-Based Services (HCBS) markets. During this period, Simplura grew revenue at a CAGR of 14 per cent.
“Our partnership with OEP enabled Simplura to accelerate growth through acquisitions that created geographic density and expansion into fast-growing markets, while improving alignment with state agencies and Managed Care Organisations. Importantly, throughout this growth we have maintained our reputation as a trusted home care services provider to high-cost, medically fragile patient populations,” said Middleton. “We are excited about the opportunities ahead for our well-trained caregivers and associates who will join an organisation that provides complementary services for millions of ageing seniors and disabled adults.”
In addition to driving Simplura’s growth, OEP invested in operational improvements and technology infrastructure to significantly improve the Company’s back-office homecare management, payroll, finance and administrative, education and training systems and processes.
The demand for home care services is continuing to increase as more states seek to transition seniors and disabled patients out of long-term care facilities and into home and community-based settings where cost of care, health outcomes and patient satisfaction are superior.
“Simplura’s scale, robust technology infrastructure and staff of devoted care givers have made it an exceptionally attractive partner for Medicaid managed care and Medicare Advantage programs seeking value-based care,” says Brad Coppens, Managing Director at One Equity Partners. “We’re certain that the patients and managed care partners of Providence Services Corporation will benefit from the tireless dedication of the entire Simplura team.”
Guggenheim Securities LLC is serving as exclusive financial advisor to Simplura and Kirkland & Ellis LLP is serving as its legal advisor.
The transaction is expected to close in the fourth quarter of 2020, pending regulatory approvals and customary closing conditions.
