Amedisys to Acquire Contessa Health to Create a One-stop Home Healthcare Delivery Platform

Amedisys, Inc. (AMED) inked a deal to acquire Contessa Health, to capture the growing market demand and evolving patient preference for higher-acuity, in-home settings. The financial terms of the deal have been kept under wraps.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Shares of Amedisys, the leading healthcare at-home company offering personalized home health, hospice, and personal care, have jumped 19% over the past year.

Contessa Health enables patients to recover from acute or post-acute health conditions and surgical procedures from the comfort of their homes. Founded in 2015, it has partnerships with several health systems across the U.S. and has a strong pipeline for possible expansion, with over a hundred hospitals across more than 28 states.

The addition of Contessa’s higher acuity, home-based care is a great strategic fit to Amedisys’ current range of home-based services and will expand Amedisys Total Addressable Market (TAM) for in-home care services from $44B to $73B.

The acquisition is expected to close later this summer, subject to mandatory regulatory approvals. Upon completion, Contessa will function as a wholly-owned division of Amedisys. (See AMED stock chart on TipRanks)

Amedisys CEO Paul Kusserow, commented, “While Amedisys continues to be a national leader in quality home health and hospice services, we have always worked to innovate and provide even more types of care in the home, as patients increasingly seek to ‘age in place’ in environments that are familiar and safe. Bringing the Contessa team into our family significantly advances this strategy.”

Jefferies analyst Brian Tanquilut recently maintained a Buy rating and the price target of $340 (38.8% upside potential) on the stock.

Tanquilut forecast the company to report earnings of $1.52 per share for the second quarter of 2021.

Overall, the stock has a Strong Buy consensus rating based unanimous 6 Buys. The average Amdisys price target of $335.83 implies 37.1% upside potential from current levels.