VITAS seeking large acquisitions in hospice CON states

VITAS seeking large acquisitions in hospice CON states 
Hospice News; by Jim Parker; 11/13/24 
As it considers potential acquisitions, VITAS Healthcare is focused on large assets in certificate of need (CON) states. VITAS is a subsidiary of Chemed Corp. (NYSE: CHE). The company this year made its return to the M&A market after a hiatus of several years. In April, VITAS acquired Covenant Health and Community Services’ hospice operations as well as one assisted living facility in an $85 million deal. With that transaction under its belt, more are likely on the way, according to Mike Witzeman, vice president and CFO for Chemed. “We are fairly optimistic on a pipeline of potential Covenant-size deals, but there are a few hurdles from an internal perspective that we would certainly want to keep in mind. First is we like CON states or states where there are restrictions on barriers of entry,” Witzeman said during a presentation at the UBS Healthcare Conference. “The second would then be locations that, generally speaking, have some size to them. That’s important, obviously, from a patient flow perspective, but also from a staffing perspective.” The third major consideration is the price tag. The Covenant deal was sealed at a multiple of 6x to 8x EBITDA. ...