FRISCO, Texas - Addus HomeCare Corporation (NASDAQ:ADUS), a provider of comprehensive home care services, has launched a public offering of 1,500,000 shares of its common stock. The company also plans to offer underwriters a 30-day option to purchase up to an additional 225,000 shares.
Joint book-running managers for the offering are BofA Securities and Jefferies. While the offering is contingent on market conditions, no assurance can be provided regarding the completion or the specifics of the offering.
The anticipated use of the net proceeds, which amounts to approximately $81.4 million, is to repay the entirety of Addus's current credit facility debt. Remaining funds will be allocated for general corporate functions, which include the previously announced acquisition of Gentiva's personal care assets and potential future investments or acquisitions.
The offering is based on an effective shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC) on September 2, 2022. The sale of these securities will be made exclusively through a prospectus supplement and the accompanying prospectus. Investors are encouraged to read the investment details, risks, and charges outlined in the prospectus before making investment decisions.
Addus, which operates in 22 states through 214 locations, offers a variety of services including personal care, hospice, and home health services. Their primary clientele consists of the elderly, chronically ill, and disabled individuals who are at risk of hospitalization or institutionalization without these services. The company's payor clients span governmental agencies, managed care organizations, commercial insurers, and private individuals.
In other recent news, Addus HomeCare has seen a series of significant developments. TD Cowen raised its price target for Addus HomeCare shares to $128 from a previous $119, maintaining a Buy rating. This adjustment is in response to the finalization of the Medicaid Access Rule and a higher than average Personal Care rate hike in the Illinois state budget, which is expected to enhance the company's EBITDA. The firm also identified Addus HomeCare as a top Small/Mid-Cap investment idea.
Addus HomeCare has also completed a major acquisition of Gentiva's personal care operations for approximately $350 million, which is anticipated to contribute around $280 million in annualized revenues. This strategic move aligns with the company's growth objectives, expanding its reach into new regions, and enhancing its service offerings.
Addus HomeCare's shareholders have reelected three Class III directors and ratified PricewaterhouseCoopers LLP as the independent auditor for fiscal year 2024. Furthermore, Oppenheimer has increased its earnings forecasts for Addus HomeCare in response to an anticipated 5.5% increase in Illinois rates starting in 2025.
InvestingPro Insights
As Addus HomeCare Corporation (NASDAQ:ADUS) navigates its public offering, investors may find the company's financial health and market performance to be of particular interest. According to recent data provided by InvestingPro, Addus HomeCare boasts a market capitalization of approximately $1.92 billion and is trading at a P/E ratio of 29.3. This valuation is supported by a P/E ratio adjusted for the last twelve months as of Q1 2024, which stands at 27.49, indicating a balance between the company's earnings and its stock price.
InvestingPro Tips suggest that Addus HomeCare is currently trading at a low P/E ratio relative to near-term earnings growth, which could signal an attractive investment opportunity for those looking at the company's earning potential. Additionally, the stock has been observed to trade with low price volatility, providing a more stable investment option for risk-averse investors. Notably, Addus HomeCare's revenue has grown by 11.45% over the last twelve months as of Q1 2024, with a gross profit margin of 32.41%, underscoring the company's ability to maintain profitability.
Furthermore, the company's strong financial performance is highlighted by a significant return over the last three months, with a 17.39% price total return. This robust return pattern is consistent with the company's performance over the last year, which has seen a 33.29% price total return. These figures, coupled with the fact that the stock is trading near its 52-week high, at 99.23% of the peak value, suggest a positive investor sentiment and a potentially bullish outlook for the stock.
For those considering an investment in Addus HomeCare, there are additional InvestingPro Tips available, offering deeper insights into the company's financials and market performance. Interested investors can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to these valuable tips and helping them make more informed decisions.
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