BrightSpring Files to Go Public, Eyes $1.5 Trillion Opportunity


One other huge home-based care participant goes public.

BrightSpring Well being Companies filed the paperwork for a $100 million preliminary public providing on Monday, realizing the long-time hypothesis of business insiders who believed an IPO was only a matter of time for the Louisville, Kentucky-based firm.

“We’re a vital a part of our nation’s well being supply community as a front-line supplier of high-quality and cost-effective care to a big and rising variety of individuals, who more and more require a mixture of specialised options to allow holistic well being care administration,” BrightSpring wrote in an S-1 filed with the U.S. Securities and Change Fee (SEC).

BrightSpring is unable to touch upon the information right now, an organization spokesperson instructed Residence Well being Care Information in an electronic mail.

Previously generally known as ResCare, BrightSpring is a extremely diversified, impartial supplier of home- and community-based providers, with a footprint in all 50 states. The corporate was acquired by world funding agency KKR and an affiliate of Walgreens Boots Alliance (Nasdaq: WBA) for $1.32 billion in 2019.

Led by CEO and President Jon Rousseau, BrightSpring has leveraged its strategic concentrate on complementary providers to develop quickly over the previous few years.

Presently, the corporate’s medical choices embrace house well being, hospice and home-based major care, along with in-home rehab and behavioral well being providers. In the meantime, its supportive care choices characteristic a number of providers to assist weak populations with actions of every day residing (ADLs) and social determinants of well being (SDoH).

Alongside its provider-services portfolio, BrightSpring operates an unlimited pharmacy-solutions enterprise, partly because of a merger with PharMerica, which occurred as a part of the KKR-Walgreens transaction. BrightSpring’s pharmacy options serve sufferers in each facility-based settings and the broader group, together with the house.

Earlier this 12 months, BrightSpring launched a brand new “Proceed Care” program designed to ship longitudinal medication-therapy and risk-management providers for its house well being sufferers. This system contains in-home assessments, remedy reconciliations, deliveries and extra, all of which is supported by nurse and marketing consultant pharmacist check-ins and interventions.

Rousseau instructed HHCN in June 2020 that it’s the mix of medical and supportive supplier providers, with pharmacy capabilities blended into the formulation, that offers BrightSpring its predominant aggressive benefit.

“With advanced populations, if the remedy remedy aspect isn’t below management or if there are day-to-day points within the house surroundings — whether or not dietary points, fall hazards, transportation obstacles or grooming and bathing challenges — issues can shortly spiral,” he mentioned. “And positively issues which can be extra medical in nature — problems from COPD or coronary heart illness, for instance — could cause anyone to have to depart their house or present setting and go right into a hospital and institutional setting.”

A altering market

Following the IPO, BrightSpring plans to listing on the Nasdaq. It has not chosen a ticker image, nevertheless.

Beneficial HHCN+ Exclusives

The corporate mentioned in its S-1 that it has entry to a “$1.5 trillion mixed market alternative” throughout its enterprise traces, with “quite a few constructive business tendencies and drivers.”

BofA Securities, Credit score Suisse, Goldman Sachs, Guggenheim Securities, Jefferies, KKR, SVB Leerink, BMO Capital Markets, Deutsche Financial institution, HSBC, Mizuho Securities, Morgan Stanley, Wells Fargo Securities and William Blair are the joint bookrunners on the IPO. No pricing phrases had been disclosed.

Monday’s information is the most recent replace to the quickly altering public marketplace for home-based care corporations in 2021.

In July, HCA Healthcare (NYSE: HCA) purchased a majority stake within the house well being and hospice enterprise of Brookdale Senior Dwelling Inc. (NYSE: BKD). Embody Well being Company (NYSE: EHC) has equally been engaged on a separation of its house well being and hospice phase all year long.

New gamers are actively trying to form the market as nicely, corresponding to DTRT Well being (Nasdaq: DTRTU), a particular function acquisition firm (SPAC) led by house care veteran Mark Heaney.

“Residence care is the answer,” Heaney instructed HHCN shortly after launching his SPAC. “It’s the long-term answer, and it will likely be without end. We’re by no means going again to an institution-first mannequin. It’s by no means going to occur.”

ModivCare (NYSE: MODV), beforehand generally known as The Windfall Service Company, is likewise shaking up the home-based care panorama. The Denver-based well being care providers firm acquired CareFinders Whole Look after $340 million in July, lower than a 12 months after it purchased Simplura Well being Group for $575 million.

Atlanta-based Aveanna Healthcare (Nasdaq: AVAH) additionally went public early this 12 months.

And in June, Bloomberg Information reported that Assist at Residence was contemplating going public.

Those that observe the house well being and residential care industries lengthy believed BrightSpring would pursue an IPO, with one other risk being the Dallas-based AccentCare.

“I believe once you’re attempting to foretell who is likely to be the following firm to go public, it’s important to begin with measurement. The largest privately owned in-home care corporations proper now, to my data, are BrightSpring and AccentCare,” Mertz Taggart Managing Accomplice Cory Mertz instructed HHCN this summer season. “They each have the scale and scale the place it would make sense to do a public providing.”

Aggressive benefits

In 2020, BrightSpring grew its income by $1.1 billion, or 23.3%, to $5.6 billion. Its house and group well being supplier providers phase income was practically $1.7 billion final 12 months, accounting for roughly 30% of whole income.

The corporate’s medical and supportive care providers delivered over 16 million hours of care in 2020 to house well being, hospice and senior house care sufferers, with a census of over 30,000. BrightSpring’s house well being and hospice companies have grown over 81% over the previous 12 months alone.

“Nearly the entire purchasers and sufferers that we serve have power situations,” it acknowledged within the S-1. “The overwhelming majority of them obtain their providers on a recurring foundation over lengthy intervals of time, with our supplier providers affected person base having a mean of six power situations per affected person.”

Along with its expansive service portfolio, BrightSpring sees its income diversification as a serious benefit.

As of Dec. 31, 2020, 43% of its income got here from Medicare, with 27% coming from Medicaid and 18% from business sources. About 5% of its income got here from authorities applications, with 7% coming from private-pay and different sources.

“As reimbursement fashions proceed to evolve, our complementary, value-add providers and diversified [payer] combine permits us to doubtlessly enter into high quality and value-based ​​contracts that may enable us to appreciate higher incentives and financial savings than in the present day and take danger,” BrightSpring mentioned within the S-1.

​​Since 2018, BrightSpring has accomplished 42 acquisitions throughout a number of enterprise traces, together with strategic and tuck-in offers.

Because it has been lively on the m&A entrance, it launched a number of new de novo areas as nicely. BrightSpring has expanded to 75 new areas in 31 states since 2018, having opened eight in 2018, 22 in 2019, 30 in 2020 and 15 within the first six months of 2021.

“We imagine we are able to replicate our historic efficiency of opening 20 [to] 30 de novo areas per 12 months,” the S-1 defined.