SOURCE: Stoneridge Partners

Stoneridge Partners

February 08, 2010 08:19 ET

Stoneridge Partners Announces Its Home Health Index

FORT MYERS, FL--(Marketwire - February 8, 2010) - Stoneridge Partners, a national home health and hospice merger and acquisition firm, is pleased to announce the first publication of their Home Health Index (HHI). The HHI measures the performance of four publicly traded Medicare home health companies, all listed on the Nasdaq -- Almost Family, LHC Group, Gentiva and Amedisys. Don Cummins, the firm's founder, stated, "We are pleased to announce the first edition of the Home Health Index, which we believe will provide some insight into this dynamic sector."

To view the Stoneridge Partners home health index, click the link below:

From January 2002 through January 31, 2010 the index rose from 6.82 to 36.91, an increase of 441%, vs. the S&P 500, which declined by 5% over the same period.

"This index shows a clear trend of growth. As our population ages, the elderly and frail, who would otherwise be in a facility setting, are able to stay in their home, where they want to be, and receive skilled care at a significantly lower cost," commented Stoneridge Partners vice president, Cory Mertz. "An 85-year-old man at home recovering from hip replacement, for example, will cost Medicare less than $100 per day vs. $5,000 per day or more in a hospital setting."

The last twelve months tell another interesting story. "In February 2009, President Obama set a target of $39 billion in cuts to the home health industry over a ten-year period. In response, the home health stocks dropped an average of 45%.

"From an M&A standpoint, 2009 was a challenging year. Owners of home health agencies don't easily change their value expectations, while the buyers were forced to become more conservative due to the uncertainty in reimbursement. This expectation gap tends to impede transactions.

"Although future reimbursement is not yet settled, buyer sentiment has markedly improved, and we are now seeing valuations of home health agencies at about the same level they were in early 2009. This correlates with our index, where we have seen the stock prices of these companies recover substantially all of their losses.

"We expect to see this value gap continue to shrink due in part to pent-up demand from the large strategic buyers who are hungry for accretive acquisitions in order to bolster growth. We therefore expect 2010 to be a strong year for the home health M&A market," said Mertz.

Stoneridge Partners is a merger and acquisition firm that specializes in home health agencies and hospices, exclusively.

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