Private Equity Backing Becoming ‘Qualifying Criteria’ for Home Care Franchise Companies


The previous few years have seen personal fairness gamers plant a flag within the residence care area, notably within the franchising world. In 2021, this pattern has solely elevated with the heightened demand for residence care providers.

Roughly $66 billion in PE funding went out to numerous well being care sectors in 2020, a 21% improve in comparison with 2019, in response to statistics cited at a particular listening to held by the Home Methods and Means Subcommittee on Oversight in March.

Total, the amplified consideration from monetary backers is a optimistic for the house care trade, in response to J.J. Sorrenti, CEO of Greatest Life Manufacturers.

“I feel the demand is sweet for everybody,” Sorrenti stated throughout a panel at Residence Well being Care Information’ Franchise Discussion board. “It’s clearly good for the corporate — the valuations are growing. It’s additionally good for the worth of the franchisees’ companies, having a financially robust franchiser with personal fairness [backing]. It permits for funding in instances of disaster and for the corporate to be extra versatile.”

Bloomfield Hills, Michigan-based Greatest Life Manufacturers is the holding firm for a handful of senior care firms, together with home-based care suppliers ComForCare, At Your Facet and Enhance Residence Well being Care.

Backed by PE agency The Riverside Firm, Greatest Life Manufacturers’ portfolio consists of over 400 franchise places throughout the U.S. and Canada.

The CEO of one other PE-backed firm, All the time Greatest Care, believes that curiosity from monetary backers indicators future development from residence care at massive.

“Personal fairness companies are drawn to development firms,” Jake Brown, CEO of All the time Greatest Care, stated in the course of the panel. “The truth that there’s such a excessive curiosity in senior care franchisers is a testomony to our trade and the way forward for our trade. They’re investing in one thing they consider has a trajectory and a whole lot of alternative for development.”

Roseville, California-based All the time Greatest Care is a house care franchise firm that operates throughout 224 territories in 30 states and Canada. The corporate is backed by PE companies Gemini Buyers and Plenary Companions.

Brown famous that for senior care franchises, the involvement of a PE agency or strategic investor can be an indication that an organization has made it to the massive leagues.

“[Their involvement] is nearly a qualifying standards as of late,” he stated. “In any other case, it would counsel you haven’t fairly arrived.”

Whereas the general public well being emergency has, little doubt, created additional demand for home-based care, it’s unlikely that PE curiosity within the area is fleeting.

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PE isn’t simply shaping the way forward for the house care market, nevertheless. Strategic buyers are additionally an element, in response to Synergy HomeCare CEO Charlie Younger.

“I feel the exercise that we’ve seen is a sign of how exterior markets see the worth of residence care,” Younger stated in the course of the panel. “I’d count on that you’ll proceed to see personal fairness curiosity. I feel what we’ve seen this 12 months is, you’re beginning to see what we’d name ‘strategic curiosity,’ as effectively. The pandemic has shifted or accelerated ageing in place.”

NexPhase Capital-backed Synergy is a Gilbert, Arizona-based non-medical residence care franchise that operates roughly 380 franchise places nationwide. The corporate affords companionship providers, along with private help, housekeeping, live-in care and 24-hour residence care providers.

Regardless of a principally favorable view of PE companions, Sorrenti confused the significance of teaming up with a agency that isn’t solely involved with their ROI.

“Ensuring that monetary accomplice cares concerning the consumer and cares concerning the franchisee is absolutely essential,” he stated.

Over the previous few years, Greatest Life Manufacturers has seen nearly all of its development come by franchise growth.

“We all know the providers we offer are so precious, so getting extra pins on the map and being extra handy to the consumer is absolutely an initiative that we expect is essential,” Sorrenti stated.

On its finish, All the time Greatest Care has doubled in income over the past 5 years.

“Loads of that’s simply natural development, with our franchise house owners actually pushing the envelope and rising their companies,” Brown stated. “We’re discovering nice new franchisees to affix our group and execute effectively.”

Synergy has seen constant development regardless of workforce-shortage headwinds. In 2020, the corporate hit a roughly 35% development charge on new franchisees, and it has seen a good stronger trajectory in 2021.

“We’ve got already eclipsed final 12 months’s quantity this 12 months,” Younger stated. “We’ve had and proceed to have some nice territories.”

Nonetheless, Younger believes that the important thing to its success is making a group for Synergy’s franchisees.

“When prospects come to take a look at us and take into consideration becoming a member of our franchise group, tradition is one thing that they’re actually drawn to,” he stated. “We’re very centered on creating collaborative and related tradition. … We need to ensure that we join our franchisees collectively to assist one another reap the benefits of alternatives.”