Shares of Almost Family Inc. hit a new 52-week high Friday, bucking the overall market's downward trend, as analysts praised the home health care provider's planned acquisition of East Coast home health care agency Patient Care.
On Thursday, the Louisville, Ky.-based company agreed to buy Patient Care, in a move to expand its presence in the Northeast with three locations in New Jersey, one in Pennsylvania and four in Connecticut. The $45.2 million deal is the company's largest to date.
Jefferies & Co. analyst Arthur Henderson said he is "very excited" about the transaction, since it gives Almost Family a solid expansion platform in the region.
In addition to significantly adding to fiscal 2009 earnings per share, the deal "underscores management's focus on delivering on its promises, business growth, and increased shareholder value," Henderson wrote in a note to clients.
He backed a "Buy" rating and $31 price target on shares.
AvondalePartners analyst Derrick Dagnan said the acquisition will more than offset the earnings impact of the company's second-quarter stock offering, which will likely dilute earnings per share by about 17 cents. He also reaffirmed a "Market Outperform" rating on the stock.
Stephens Inc.'s Whit Mayo said Almost Family is making a "big statement." He thinks the companies have nice overlap in the N.J. market and that the deal gives Almost Family the potential to expand its footprint via new start-ups, as well as plants the company on new hunting ground to accelerate M&A activity.
He reiterated an "Overweight" rating and $29 price target.
In afternoon trading, shares rose 76 cents, or 3 percent, to $25.66, having peaked at $25.98 earlier in the session. Previously, shares ranged between $13.69 and $25.56 over the past year.
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