Addus HomeCare' (ADUS) $275 million acquisition of AccentCare's personal care division will likely support its growth objectives in 2027 and 2028, UBS Securities said in a note Tuesday.

The deal, expected to close in H1 2027, will likely be immediately accretive and will also boost the company's "already strong presence in Illinois and Texas," the note said.

While the acquisition will increase Addus' exposure to the Medicaid program in the two states, it will also provide a "considerable opportunity to leverage its existing infrastructure in those two states creating ample synergy opportunities over time," the bank said.

UBS said that Addus indicated that without any synergies or a $33 million tax benefit, the purchase multiple is 10.8 times current EBITDA. When including the near-term tax benefit, the deal valuation goes down to 9.5 times current EBITDA, the note said.

"First year synergies seem likely to further bring the multiple paid down by one turn, with further upside (revenue and margin gains) expected in year two and beyond," the note said.

UBS also said it believes the fundamental outlook for Addus "remains positive as the company benefits from secular trends such as baby boomers beginning to age into their 80s."

UBS has a buy rating on Addus and a $145 price target.

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