BrightSpring Diversifies Business to Build Scale

Building a diversified portfolio of services is a cornerstone of BrightSpring Health Services Inc. (NASDAQ: BTSG) efforts to grow its scale and market share.

The company currently offers services ranging from hospice, home health, rehabilitation, behavioral health and a large pharmacy business. Going forward, the company plans to launch a home-based primary care service, CEO Jon Rousseau said at the Jefferies Global Healthcare Conference.

“We really continue to focus on multiple services for our patients. Every single one of the complex seniors and specialty populations that we serve has a need for multiple services,” Rousseau said. “If we have the ability to better coordinate and provide those services, that’s an advantage for them and it’s obviously a scale advantage.”

Complementing this is a diversified customer base that includes hospitals, skilled nursing and assisted living facilities and direct-to-consumer services, among others, Rousseau said.

These strategies have been propelling the company’s growth.

During the first quarter of the year, BrightSpring saw net revenue rise 27% year-over-year to $2.5 billion. The Louisville, Kentucky-based provider achieved a gross profit of $369 million, up 10.4% compared to $335 million in Q1 2023, but experienced a net loss of $46 million, up from a $22 million loss in the first quarter of 2023.

The company’s health care provider services segment, which includes its hospice business, as well as home health and other services, accounted for $600 million in Q1 revenue, up 7% from $561 million year-over-year.

“We’re really continuing to try broad-based growth in the organization with our position serving very large markets,” Rousseau said. “There’s a very high need and demand in seniors in specialty populations … We’re also really with that volume, growth and scale, leveraging a lot of our platform for efficiencies and best practices throughout the business. “Almost all the businesses are growing at double digits in the organization today, as we focus on these big populations with really high-quality service offerings.”

The company went public in January with a successful initial public offering (IPO). BrightSpring is a home- and community-based health care services platform that serves more than 400,000 patients daily. The company indicated its intent to go public in a Jan. 3 filing with the U.S. Securities and Exchange Commission, with a $1 billion IPO.

Prior to going public, BrightSpring was owned by affiliates of the investment firm KKR Phoenix Aggregator L.P. and Walgreens Co., a portfolio company of Walgreens Boots Alliance Inc. (NASDAQ: WBA). These stakeholders continue to hold the majority of Brightspring’s shares.

The company’s growth strategy also stands on two other pillars — “aggressive” sales and marketing and acquisitions, Rousseau said. BrightSpring has completed about 60 transactions during the past five years, he indicated during the conference.

We’ve been able to really drive a lot of acquisition synergies. Our growth historically has been three things: volume growth, efficiencies and then accretive acquisitions,” Rousseau said. “We operate in huge markets that remain extremely fragmented. You could continue to do tuck-in acquisitions for the next decade.”