Aveanna Shares Fall as Major Holder Prices $90M Stock Sale at Discount
The secondary offering by private equity firm J.H. Whitney comes as the home healthcare sector grapples with labor shortages and reimbursement pressures.
Shares of Aveanna Healthcare Holdings Inc. (NASDAQ: AVAH) declined Wednesday after a key institutional investor priced a significant secondary stock offering at a steep discount to the previous day's closing price.
The Atlanta-based home healthcare provider announced that selling stockholders affiliated with private equity firm J.H. Whitney Equity Partners priced an offering of 10 million shares at $9.00 each. The price represents a 12% discount to Aveanna's closing price of $10.23 on Tuesday, valuing the total transaction at $90 million.
In morning trading, Aveanna's stock fell to align with the offering price, trading down approximately 11.9% at $9.01 on heavy volume. The move puts pressure on a stock that has seen a significant rally over the past year, rising from a 52-week low of $3.67.
Crucially, Aveanna itself will not receive any proceeds from the sale. In a , the shares are sold by existing investors, in this case, a major private equity backer. Such sales can signal that large, early investors are seeking an exit or taking profits, a move that can unnerve the broader market by increasing the public float and suggesting insiders see limited near-term upside.
The sale by J.H. Whitney comes at a complex time for the U.S. home healthcare industry. While the sector is buoyed by powerful demographic tailwinds, including an aging population and a growing preference for at-home care, it faces significant operational and financial headwinds. According to recent industry analysis, the U.S. home healthcare market is projected to reach over $222 billion in 2025, but providers are struggling with persistent challenges.
One of the most acute issues is labor. High caregiver turnover rates, which reached 77% nationally in 2024, and widespread staffing shortages are squeezing operators' margins and capacity for growth. Simultaneously, providers face a challenging reimbursement landscape. The Centers for Medicare & Medicaid Services (CMS) finalized a rule for 2025 that includes a to Medicare payment rates, creating further financial pressure on companies like Aveanna.
Against this backdrop, the decision by a major investor to liquidate a substantial position, even after a strong stock run, may reflect a broader assessment of the sector's near-term risks. The offering price of $9.00 is slightly below the Wall Street consensus analyst price target of $9.22, indicating the shares were priced competitively to ensure the large block could be absorbed by the market.
Jefferies and J.P. Morgan are acting as joint lead book-running managers for the offering. The underwriters have been granted a 30-day option to purchase up to an additional 1.5 million shares from the selling stockholders, which could bring the total size of the sale to over $103 million if exercised in full. Investors will be watching to see how the stock behaves as this large supply of shares is digested by the market.