Tucson-based social-service provider Providence Service Corp. says it has entered into an agreement to acquire Scottsdale-based CCHN Group Holdings Inc., an in-home health-care management provider that does business as Matrix Medical Network.
Providence said Thursday it will acquire privately held Matrix for a total purchase price of $400 million, comprised of $360 million in cash and 946,722 shares of Providence common stock with a value of $40 million as of the close of trading on Wednesday.
Matrix is owned by New York-based private equity firm Welsh, Carson, Anderson & Stowe XI LP, which will own most of the issued shares, Providence said.
Matrix is a major provider of health risk assessments for Medicare Advantage health plans and providers, with operations in 33 states. Providence said the acquisition will expand Providence’s clinical capabilities and home-based services with the addition of operations that include more than 600 nurse practitioners.
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The deal is expected to close as soon as the fourth quarter of 2014, subject to customary regulatory approvals and closing conditions, Providence said.
Matrix uses its network of nurse practitioners to evaluate patients and coordinate their care in collaboration with primary-care providers, health plans and community resources, Providence said.
Matrix has grown rapidly over the last five years, generating $187 million in revenue for the 12 months ended June 30, according to Providence.
“The acquisition of Matrix adds a new growth vertical for Providence that is complementary to our current business lines and leverages our core competencies, including working with government-sponsored programs,” Providence CEO Warren Rustand said in prepared remarks.
Providence provides an array of in-home and community-based social services such as counseling and non-emergency medical transportation, mainly under state government contracts.
Wall Street cheered the deal. Providence’s stock rose more than 8 percent Thursday, closing at $45.76 in trading on the Nasdaq Stock Market.