Addus HomeCare Corp. (Nasdaq: ADUS) is aiming to use its acquisition of Gentiva’s personal care assets to slingshot its growth.
In 2024, the home care provider acquired Gentiva’s personal care assets in a $350 million deal, gaining entry into new geographies – most notably Texas, where CEO Dirk Allison sees a significant growth runway for personal care services.
“When you think about acquisitions and personal care business, one of the biggest states out there for growth and personal care is Texas,” Allison said at Jefferies Global Healthcare Conference on Tuesday. “We had not had any position in Texas prior to the Gentiva transaction. Today, while we’re the largest provider, we’re only 5% of the market. So as we look forward to the next number of years, Texas is one of the states in which we will be looking to grow rapidly.”
While the Gentiva acquisition went “very well,” according to Allison, the company is still fully wrapping up its integration efforts. It has yet to consolidate its electronic medical records (EMRs), but plans to do so by late 2026.
The company has already seen beneficial rate increases come from operating in Texas. In June, the company forecast that Texas’ 9.9% increase in the base hourly reimbursement rate in its 2026 budget would increase its annual revenue by $17.7 million.
Addus currently provides home care services, primarily personal home care as well as hospice and home health services, through 260 locations in 23 states. The company targets a 10% growth rate each year, half of which it plans to achieve through acquisitions.
Chief Financial Officer Brian Poff stated that the company aims to see volume growth of between 2% and 2.5% annually. In pursuit of this growth, Addus leverages technology to increase hours with existing clients, hire new caregivers and attract new clients. The company has seen some complications because of Medicaid redeterminations, however.
“We saw a little bit of pressure [over] the last year plus, on redeterminations impacting resources and some of the state agencies that have really kind of kept us fairly flat as we started to see some sequential increases in census the last couple quarters,” Poff said. “So I’d like to see that trend continue.”
The One Big Beautiful Bill Act also represents a potential bump in the road, Allison said, but Addus works with states to explain the cost-saving nature of home care.
“From our standpoint, what we do is go in the state and make sure they understand that if you’re not able to support us, and we’re not able to keep these people at home with about 70 hours a month of paid support, the alternative is they’re going to go into a nursing home that’s covered by your Medicaid program,” Allison said. “It’s going to be 24 hours a day care, seven days a week, and generally, depending on the state, two to three times more expensive than staying at home.”