Aveanna Files for $100M IPO, Announces Major Expansion Plans

Home Healthcare

Aveanna Healthcare Holdings Inc. — a large and rapidly growing in-home care company that historically has specialized in caring for complex pediatric patients — is attempting to go public.

The Atlanta-based home health provider announced plans to raise $100 million in an initial public stock offering on Thursday. In its paperwork, Aveanna also revealed an emerging long-term strategy to heavily invest in its adult home health operations.

“We believe that we have the opportunity to leverage our national home health infrastructure to develop an industry leading adult home health and hospice business similar in size and scale to our pediatric home health business,” the company noted in an S-1 financial filing. “We believe this long-term expansion strategy in adult end markets through de novo expansion and acquisitions will provide Aveanna with a highly distinctive profile as compared to its home health peers, with more diversified reimbursement sources, a lower risk profile and a broader set of organic and inorganic growth avenues to pursue opportunistically.”

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Aveanna was formed in March 2017 following the merger of Epic Health Services Inc. and Pediatric Services of America Inc. Since then, the provider has grown its business fivefold, taking advantage of a highly diversified payer mix and the general demand for in-home care services nationally.

Over the past five years, Aveanna has expanded from 17 states and $324.6 million in revenue to 30 states and about $1.5 billion in revenue as of fiscal year 2020. The company — led by Executive Chairman Rodney Windley and CEO Tony Strange — has 245 branch locations overall.

“Adult home health and hospice are natural extensions of Aveanna’s core home health infrastructure,” the S-1 continued. “In particular, the adult home health business leverages our platform infrastructure and core competencies in clinical program management, automated and efficient nurse recruitment, technology-driven revenue cycle management, payer contracting and entry into new geographic markets.”

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In 2020 alone, Aveanna completed at least five acquisitions, with its most recent being the purchase of Recover Health for about $61 million. Its largest acquisition last year came in October, with the purchase of Five Points Healthcare for $64.4 million.

Although the company plans on aggressively pursuing adult home health and hospice opportunities, it likely will maintain a focus on pediatric private-duty nursing (PDN) as well. Even more so than the adult home health business, the pediatric home health landscape is extremely fragmented, with small, local agencies making up at least 75% of the market.

“PDN, which is our largest business today, is a stable and steadily growing industry with growth tailwinds from rising adoption of home care in lieu of family and institution-based care, and inflationary reimbursement trends that track general inflation in nurse labor,” the S-1 states. “PDN addresses the needs of children with medical complexity, many of whom age into adulthood and continue to require intensive care in the home.”

The number of shares to be offered and the price range for the proposed offering have not yet been determined. Aveanna intends to list its common stock on Nasdaq under the ticker symbol “AVAH.”

Aveanna projects the broader home-based care market — including pediatric home health, in-home therapy, hospice, personal care and other services — to have been a $107 billion opportunity in 2020.

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