Topic: How To Invest

Spinoffs & Takeovers Hotline – Friday, November 15, 2024

Article Excerpt

CHEMED CORP., $557.95, symbol CHE on New York, operates two wholly owned subsidiaries: VITAS Healthcare and Roto-Rooter. The two units are in distinctly different businesses and have completely separate operations. VITAS (65% of sales) is the largest provider of end-of-life hospice services in the U.S., and Roto-Rooter (35%) is the nation’s leading provider of plumbing and drain-clearing services. In April 2024, VITAS acquired Covenant Health and Community Services Inc.’s hospice assets and assisted living facility for $85.0 million in cash. Covenant’s hospice operations span the panhandle of Florida and Alabama, specifically including the Tallahassee, Marianna, Fort Walton Beach, Panama City, Crestview and Pensacola markets in Florida, and the Dothan and Mobile/Daphne markets in Alabama. In the quarter ended September 30, 2024, the company’s revenue was $606.2 million, up 7.4% from $564.5 million a year earlier. VITAS saw revenue increase by 17.3% in the third quarter due to a 15.5% increase in days-of-care and a 2.6% increase in Medicare reimbursement rate. Recently acquired Covenant…