Next hot IPO spot: elder care?

In Washington, it looks like health care will undergo a transformative change, with trillions of dollars at stake. This highlights the critical fact that the American population is aging – which means that health care demand will likely continue to ramp up.

No doubt, there will be financial winners. One area is likely to be elder care.

In fact, this week one of the players in the space -- Addus HomeCare Corporation – has filed to go public. The company provides personal care and assistance in the home. These include: assistance with bathing, grooming, medication reminders, speech/physical therapy and skilled nursing services. Addus provides its services on a short-term basis (the average length is 54 days).

From 2007 to 2008, revenues increased 21.5% to $236.3 million, with adjusted EBITDA of $17.2 million. However, there is significant customer concentration. For example, The Illinois Department on Aging accounted for 31.6% of revenues. What's more, the heavy reliance on government programs is certainly a big risk factor.

Yet, the fact remains that homecare represents a big growth opportunity. And it looks like Addus is well positioned to capitalize on the trend.

The lead underwriters on the public offering include Jefferies & Company (NYSE: JEF) and Robert W. Baird & Co. You can also check out the prospectus at the SEC's website.

Tom Taulli is the author of various books, including The Complete M&A Handbook, You can reach him at his personal blog.