Three Oaks Hospice is a Dallas, TX based provider of hospice services to Medicare patients. The Company was created by the former management team of New Century Hospice, a successful Petra portfolio company. Three Oaks aims to buy hospices throughout the central United States and create value by increasing the census at these hospices organically through dedicated sales and marketing.
Situation
In May 2019, Petra co-led a $21 million financing with Granite Growth Health Partners and Health Velocity Capital to finance the founding of Three Oaks Hospice. Petra had the opportunity to invest alongside founding management team members David Gasmire and Andrea Bohannon who had previously managed New Century Hospice, a prior Petra portfolio company. In conjunction with this financing, Three Oaks acquired programs in Dallas, Fort Worth and San Antonio with an average daily census (“ADC”) of approximately 267 patients.
Petra’s Role
In addition to its equity investment, Petra structured a delayed draw subordinated debt facility to provide Three Oaks with a committed pool of capital to grow via acquisition. Throughout the investment, Three Oaks made 10 acquisitions and acquired 524 ADC. In addition to the acquisitions, the company grew organically through de novos and same store growth producing an industry leading average annual organic revenue growth rate of 32% over Petra’s hold period. Throughout the life of the investment, Three Oaks grew from a base of approximately 267 patients to 1,500 patients. In addition to providing creatively structured capital, Petra served on the Board at Three Oaks, was a member of the Compensation Committee and was instrumental in providing strategic direction to the Company.
Results
In October 2024, Three Oaks was recapitalized by a leading healthcare focused Private Equity firm generating over a 3x return on Petra’s original investment.