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From Good to Great: How Aventis Transformed Caring Hands

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Introduction and Background Caring Hands, established in 1999 and based in Omaha, Nebraska, has been a trusted provider of non-medical home care services for over two decades. Serving more than 600 clients annually, the company works with all home care payors, such as Medicaid Waiver, Long-Term Care Insurance, Private Pay, and the Veterans Administration. Caring Hands’ dedicated team of non-skilled caregivers provides compassionate care to clients across Nebraska and western Iowa. Like many family business owners, Ted, the owner, was so busy “working in” the business that he had little time to “work on” the business. This is something we see all too often with family-run businesses where owners lack the time, resources, or knowledge to realize the full potential of their business. This is where Aventis stepped in and made a big difference for Caring Hands! Transaction Overview In June 2023, Aventis Alpha Care successfully acquired Caring Hands. And we couldn’t be more proud! We recognized the company’s solid reputation and longstanding commitment to quality care, making a great foundation for continued growth and even more success. However, to realize the company’s full potential we had to address the challenges faced by the company — recruiting caregivers, increasing market awareness and creating a culture of accountability. It was a tall order, but our team of experts, with over +100 years of home care experiences under their belt, was more than up to the challenge! Strategic Initiatives and Value Creation Enhancing Operational Efficiency and Accountability Like all home care businesses, Caring Hands aims to provide the highest quality care, allowing clients to lead their best lives; however, without tying those lofty goals to concrete metrics, there is no way to track service and know if we are succeeding. So, we implemented a KPI dashboard and a new office whiteboard to track key metrics, ensuring everyone was focused on the measurable actions that would lead to the achievement of the company’s goals. We also integrated exciting new technology, like an Application Tracking System and CRM system, which helped the company effectively manage caregiver applicants and incoming referrals. These improvements made recruiting caregivers much easier, increased client satisfaction, and created a culture of organization-wide accountability. Strengthening Leadership and Expanding the Team Strong leadership is essential for the most positive and successful work culture. We welcomed Jim Martens as the new COO of Caring Hands, bringing his vast experience and fresh perspective. We also expanded the team by hiring H.J. More as the head of sales, a new recruiter with a military background, and a bilingual scheduler to better serve our diverse client base. Additionally, we recruited the marketing director, who was single-handedly responsible for driving census expansion for one of the country’s largest national home care chains. These new team members have been instrumental in driving growth, enhancing community engagement, and ensuring the smooth operation of the company. Driving Marketing Innovations and Client Expansion We undertook a comprehensive marketing overhaul to boost Caring Hands’ presence and client satisfaction. This included launching a new website, running targeted SEO and PPC campaigns, and encouraging clients to leave reviews on major platforms. We also adopted cutting-edge marketing tactics such as AI and “geofencing” advertisements, alongside traditional methods like monthly newsletters. These efforts have helped us expand our reach, focus recruitment, and skyrocket our client base in targeted neighborhoods and counties. Additionally, our innovative “Caring with Pride” campaign, where caregivers act as brand ambassadors, has boosted caregiver recruitment and enhanced brand visibility in rural areas. Looking Ahead: Expanding the Caring Hands Phenomenon Looking ahead, we aim to expand the Caring Hands phenomenon across states, payor sources, and service lines. Our exciting goal is to broaden our footprint, increase service offerings, and improve clients’ lives, ultimately building the premier care provider in the nation. And here’s the best part: Whether you’re interested in selling your business today or in the future, we offer home care owners the opportunity for a partnership by retaining a stake in the business. That way, owners can profit as the value of their stake grows while enjoying dividends for life. This is excellent for owners who can gain not only from the initial sale but also from dividends and the increased value of their stake.

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Valuing Your Home Care Business

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Why a Business Valuation is Crucial for Your Success Understanding what your home care business is worth is crucial for future planning, especially for family-owned companies. Whether you’re considering selling your business now or in the future, the sooner you engage in a valuation, the more time you’ll have to plan strategies, optimize your business’s worth, and achieve long-term goals. Valuation Made Easy Business Valuation can seem daunting, and at times, downright perplexing. However, valuing a business is quite similar to assessing the value of your house. It’s a fair assumption that you may have experienced this before, and if not, that’s perfectly fine too. The great news is it’s a simple process once you learn the steps involved. Valuation Methods Overview Understanding the various approaches to business valuation can provide valuable insights into your home care business’s worth: Asset-Based Valuation This method involves totaling up the fair market value of the business’s assets. Essentially, it answers the question: “If you were to sell the assets of the business, how much would it be worth?” This approach is particularly useful for businesses undergoing turnarounds, restructuring, or bankruptcy. Market Capitalization This method is predominantly applied to publicly traded companies and involves multiplying the company’s share price by its total number of shares. For example, consider the market capitalization of a company like Addus HomeCare Corporation as a reference point for understanding this approach. Valuation Multiples EBITDA Multiples) This is the simplest and most industry-standard method, particularly relevant for the home care sector. The business value is expressed as a multiple of annual Revenue or EBITDA. However, the critical aspect is that the multiple used should be similar to that of a comparable business to ensure an accurate valuation. Understanding Valuation Multiples Valuation Multiples, particularly EBITDA multiples, can be likened to evaluating the worth of a house by comparing it to the sale price of a similar neighbor’s house. In an ideal world, if your neighbor had an identical house that sells for $1M, then you could say with absolute certainty that your house is also worth $1M on the same date. The similarity of the comparable company to yours and the recentness of the information are crucial in determining the usefulness of the multiple for your business. While this is straightforward for public companies, data for private companies can be less accessible, though some research on the internet can often provide a good starting point. For the most part, most companies are in the 3 5x EBITDA multiple. Determine Your EBITDA Calculating your EBITDA involves starting with your Net Ordinary Income and making specific adjustments. Here’s a simplified breakdown: Financial Item Amount Net Ordinary Income $X Add: Depreciation $Y Add: Amortization $Z Add: Interest Expenses $A EBITDA $B Note: $X, $Y, $Z, $A, and $B are placeholders for actual figures. Key Takeaway Valuation is not an exact science; the true value of a business ultimately depends on what a buyer is willing to pay. While guidelines exist, each business is unique, and its valuation can be influenced by numerous factors. Schedule a FREE Valuation of Your Business! For a limited time only, we’d like to offer you a no-obligation valuation of your home care business. Navigating the complexities of business valuation on your own can be challenging. At Aventis, we’re here to make valuing your business a simple and stress-free process. Schedule your free valuation call with us today and learn the true value of your business so you can prepare for the most lucrative future. Get a FREE Valuation!

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