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A new partnership between Dallas-based private equity firm Coltala Holdings and Tyler, TX-based Choice Health at Home could lead to a multistate home care powerhouse. 

The two firms announced the deal Tuesday for an undisclosed sum that includes home health, hospice and rehabilitation services in 40 locations with 800 employees in Texas, Oklahoma and Louisiana. 

Coltala co-founder and President Edward Crawford told McKnight’s Home Care Daily the company is pushing aggressively to buy out smaller mom-and-pop home care agencies and rehab firms.

“Culturally we have an amazing opportunity to recruit great nurses, but also when families are transitioning and want to sell their home health and hospice business, that is an opportunity for us as well,” Crawford said.

The foundation for the deal was laid last year when Choice Health at Home acquired Home Therapy of Austin, followed this year by the acquisitions of Shawnee, OK-based Angelic Hospice and Restore Home Health, which provides home health services throughout central and northeastern Oklahoma. Coltala provided seed funding for those acquisitions. 

The private equity firm also invests in business services and manufacturing, but Coltala co-founder and CEO Ralph Manning told McKnight’s Home Care Daily home healthcare is where the company sees the biggest potential for growth. He said demographics, value-based care and especially technology are driving more care into the home.

“It’s the continuum of care that we are now calling home care with these verticals underneath it and I think technology is one of those verticals. Technology is going to drive more services being able to be provided in the home,” Manning said.

Manning predicted the cost of technology and regulatory compliance could make it harder for smaller home healthcare and hospice firms to compete, providing more opportunities for larger, well-funded firms such as Choice Health at Home to make acquisitions and expand their territories.

Crawford and Manning said for the next few years Coltala and Choice Health at Home will focus their expansion efforts in the south, but eventually they hope to expand into other regions as well.