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Private equity capitalizes on growing senior space


Emma Dickison, CEO and president of Home Helpers.

A gold rush of sorts is emerging in one franchising sector. Or perhaps “silver rush” is a more appropriate term.

Senior home care franchises are attracting private equity investors to an industry that’s only seeing increased demand, driven largely by the aging U.S. population and also home care’s growing role in post-acute care. Private equity firms acquired three franchisors on the Franchise Times Top 200+ in 2016—Senior Helpers, Right at Home and Home Helpers—followed by a fourth, ComForCare, in July.

“There’s a silver tsunami that’s coming across our country,” says Peter Ross, CEO of Senior Helpers. “Home care now plays a critical role in the healthcare continuum.”

Senior Helpers, which Ross co-founded in 2001, was acquired by Altaris Capital in October 2016 after previous capital partner Levine Leichtman exited its investment. Thirty-one initial bids came in, says Ross, followed by management meetings with 17 groups before choosing Altaris, a New York-based investment firm focused exclusively on the healthcare industry.

Altaris manages $1.5 billion in assets, Ross says, and has the expertise and contacts to assist Senior Helpers with its growth strategy that includes acquiring local, private in-home care companies.

The Towson, Maryland-based franchise is already putting those resources to work, acquiring its first-ever company location in Baltimore earlier this year, followed by its purchase in August of Handle with Care, a local business serving the Chicago area. Senior Helpers plans to continue this strategy as a way to expand into new markets and pilot new technologies and programs, such as virtual caregiver monitoring.

“A lot of times we rely on franchisees to pilot some of these new technologies,” says Ross. “Having these corporate locations in Baltimore and Chicago gives us a test kitchen of sorts to try some things out on ourselves. We feel better that we’ve vetted it, we’ve created training materials, we know that it works.”

Strategic partnerships with managed care and acute care organizations are another opportunity Senior Helpers is pursuing, Ross says, noting Altaris has “some amazing contacts” in the space. The company is piloting a program with a post-acute care facility in Texas that aims to reduce hospital readmissions and that would position Senior Helpers as the exclusive home care provider, “giving our franchisees a leg up.”

And at its annual conference this fall Ross announced Senior Helpers plans to invest $1 million over the next year in infrastructure, marketing, support and technology for its 300-plus franchisee locations, all with the goal of enhanced profitability for franchisees, Ross says.

“How do we help our franchisees is priority No. 1,” he continues. “We’re able to do that now in different ways with Altaris.”

Peter Ross

Peter Ross, CEO of Senior Helpers

Home Helpers, too, is putting private equity to work since Linsalata Capital Partners, also known as LinCap, acquired its H.H. Franchising Systems parent in February 2016.

“We’d been approached on an incredibly regular basis by offers from private equity,” says Emma Dickison, CEO and president of the Cincinnati, Ohio-based home care franchise.

“For us it was a matter of timing and finding the right partner.

“We weren’t going to do anything if we didn’t find the right partner,” she continues. “We’re a healthy company and we’ve always had good growth. So this wasn’t a necessity.”

Working with M&A and debt advisory firm Livingstone, Dickison and Home Helpers founder Gary Green considered multiple offers before deciding on Cleveland-based LinCap, which Dickison says checked the box in four key areas: experience in the healthcare sector, ability to create a strong working relationship with Dickison and her team, and “how well did they support our vision for growth—and did they have the resources to put behind it.”

In announcing the deal, Jay Studdard, managing director of LinCap, noted Home Helpers’ “record of double-digit annual growth” as proof of its value to clients and owners. Home Helpers followed up its 13.8 percent sales growth in 2015 with a 9.2 percent increase to $153 million in 2016, according to Franchise Times Top 200+ data.

Since the acquisition, Home Helpers accelerated a number of initiatives in infrastructure, technology and franchisee resources, says Dickison, specifically “a new website, new tech platforms to support our franchisees, and some digital marketing.” LinCap also brings expertise in employee benefits that Home Helpers intends to leverage.

The home health and senior care industry is in a “terrific place,” notes Dickison, and Home Helpers is on pace to have a record year.

In Livingstone’s announcement of the deal, Jim Moskal, head of its healthcare practice, says the strong interest received in Home Helpers “demonstrates the attractiveness of the non-medical segment of home health, including robust demand driven by the aging U.S. population, minimal regulatory environment, and private pay dynamics that eliminate government reimbursement risk.” Moskal adds he anticipates home health M&A activity to remain strong as valuations remain strong.

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