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Shining a light on PE ownership.

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Addus HomeCare

healthcare
PE-OWNED

A home care services provider offering personal care and hospice services to elderly and disabled clients.

PE-OWNED

Acquired by Ares Management2009-03-01

View PE Firm Profile

What Made It Great

“

Home-based care services enabling aging in place

What PE Will Likely Do

Predictions

Reductions in nursing staff and a shift towards less-qualified home health aides, leading to lower-quality care and longer wait times for clients

HIGH LIKELIHOODBased on: Ares Management's history of aggressive cost-cutting and debt loading in acquired companies, which often leads to declines in product/service quality

Attempts to upcod billing to maximize reimbursements, potentially leading to inaccurate coding and inappropriate services being provided

HIGH LIKELIHOODBased on: The healthcare industry playbook, which highlights common PE tactics that negatively impact patient care, such as staffing reductions, service line cuts, and billing upcoding

Elimination of unprofitable but essential services like specialized care for clients with complex needs or in remote areas, reducing access to comprehensive home care

HIGH LIKELIHOODBased on: The high bankruptcy rate of 23% for Ares Management's investments, indicating a track record of unsustainable business practices

Extraction of large management and consulting fees, diverting resources away from direct patient care and services

HIGH LIKELIHOODBased on: The high bankruptcy rate of 23% for Ares Management's investments, indicating a track record of unsustainable business practices

Expected Timeline

Phases
0-6 monthsCompleted

“0 to 6 months months”

Announcements of 'efficiency' programs and leadership changes, setting the stage for upcoming staffing and service cuts

6-12 monthsYOU ARE HERE

“6 to 12 months months”

Gradual reductions in nursing staff and shifts towards lower-cost home health aides, leading to early declines in care quality

12-24 months

“12 to 24 months months”

Noticeable declines in service quality, with longer wait times, more frequent missed appointments, and reduced availability of specialized services

24-36 months

“24 to 36 months months”

Potential closure of unprofitable service lines, leading to reduced access to comprehensive home care for vulnerable elderly and disabled clients

36+ months

“36+ months months”

Possible bankruptcy or fire sale to another operator, further disrupting continuity of care for Addus HomeCare's clients

Similar Cases

Other companies that followed a similar path after PE acquisition

Operating

Steward Health Care

Cerberus Capital Management·2010

See full case study
Operating

Envision Healthcare

KKR·2018

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Operating

US Dermatology Partners

Ares Management·2016

See full case study
Operating

Hahnemann University Hospital

Cerberus Capital Management·2018

See full case study
Operating

Sound Physicians

Summit Partners·2019

See full case study

What You Can Do

Take Action

Actions

  • Monitor any changes in nursing staff, service availability, and billing practices at Addus HomeCare facilities, and advocate for maintaining high-quality, comprehensive home care services

  • Be aware of potential service disruptions or reductions in care, and be prepared to switch to alternative home care providers if necessary to ensure your loved ones receive the care they need

  • Engage with local community organizations and policymakers to raise awareness of the potential negative impacts of private equity ownership on essential healthcare services

Alternatives

Non-profit health systemsSAFE

Community-focused healthcare

Kaiser PermanenteSAFE

Integrated managed care consortium

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"Addus HomeCare is now PE-owned. Here's what that means for you."