Who Buys Home-Based Care Companies? A Guide to Strategic and Financial Buyers

By Cory Mertz, M&AMI, Managing Partner, Mertz Taggart

At a Glance

A behavioral health owner who grew a solo practice into a much larger New York City business shares ten lessons from selling it. Among them: get clear on why you are selling, interview several advisors and compare them side by side, choose a behavioral health specialist you trust, protect confidentiality from the first conversation, and organize your financials long before going to market.

No matter where you are in your home-based care journey, it is never too early to ask: what comes next? One of the most common questions owners raise is who, exactly, buys home health, home care, and hospice companies. The answer varies more than most people expect.

This article breaks down the buyer universe into its main categories, explains what motivates each type, and gives you enough grounding to recognize which buyers might be relevant to your eventual exit.

The Two Buyer Types: Strategic and Financial

There are two broad categories of home-based care buyers: strategic buyers and financial buyers. Because their goals differ fundamentally, how they approach a transaction, including what they pay and what they require from a seller, can differ significantly.

Strategic buyers tend to dominate the M&A landscape in terms of deal volume. They usually operate in the same or closely connected industry and can realize synergies from an acquisition. Those synergies, whether in the form of cost savings, referral relationships, or value-based care arrangements, represent a real financial benefit, which means they can often support a higher acquisition price than a buyer who cannot capture them.

Financial buyers, by contrast, are acquiring with a targeted return on investment and a defined exit horizon in mind. They are not operators in the traditional sense, which means they typically need an existing management team or an operating partner to run the business after close.

→ Related: Home-Based Care M&A Report

Strategic Buyers

Strategic buyers in home-based care generally fall into three groups.

Public Companies

Public companies operate under Wall Street scrutiny and face reporting requirements that influence how they approach acquisitions. The price-to-EBITDA multiple at which their own shares trade can factor into whether and at what price an acquisition makes sense. Examples include Amedisys, Addus, Enhabit, Aveanna, and The Pennant Group.

This group has also expanded to include ‘payviders’, the large managed care organizations playing an active role in value-based care. Cigna (Signify), United's Optum Ventures (LHCG), and Humana's Centerwell, along with Gentiva (co-owned with Clayton Dubilier Rice), are examples of that category.

Private Equity Portfolio Companies

These are companies formed through a private equity fund's initial, or platform, investment in the sector. Their typical growth strategy involves add-on or tuck-in acquisitions around that platform. Their cost of debt, a function of the interest rate environment and their existing leverage, shapes how actively they pursue deals.

Examples of PE-backed home-based care portfolio companies include Elara Caring, Help at Home, AccentCare, Care Advantage, and Compassus.

Non-PE-Backed Strategic Buyers

Every strategic buyer that is neither publicly traded nor backed by a private equity fund falls here. Their acquisition appetite depends on their size and operational sophistication. This category includes for-profit and not-for-profit health systems, such as Trinity Health, as well as larger not-for-profits, which are particularly active in the hospice segment.

Financial Buyers

Financial buyers are investors, not operators. They acquire with a specific internal rate of return and exit date in mind, though both are subject to change depending on market conditions. To reduce execution risk, they typically incentivize existing management or bring in an industry operating partner by offering equity in the platform.

Private Equity Groups

Private equity groups raise capital from limited partners, such as pension funds or high net worth individuals, and deploy it through funds that typically run seven to ten years. They acquire stakes in businesses they intend to improve and sell at a profit, with returns shared with their LPs.

In home-based care, most PE firms pursue a roll-up strategy. A platform is acquired, then the firm adds smaller companies in new markets over time. The goal is to build a larger, more efficient entity that benefits from economies of scale and increased market share. The underlying concept is multiple expansion: the combined company can sell at a meaningfully higher EBITDA multiple than the individual companies that were acquired. Debt financing is typically used to maximize returns.

Active private equity sponsors in home-based care include KKR & Co. Inc., TPG Capital, Webster Equity Partners, Vistria, and Lorient Capital.

→ Related: What Do Buyers Know That You Don't?

Family Offices

Family offices manage capital on behalf of one or a small number of high net worth families. That structure gives them more flexibility on holding periods and investment strategy than a fund with a defined life. Like PE firms, they need a platform acquisition to enter the industry. Examples in home-based care include Dorilton Capital, through its investment in Traditions Health, and Kaltroco, which owns New Day Healthcare.

Independent Sponsors

Independent sponsors, sometimes called fundless sponsors, are individuals or small groups who identify and pursue acquisitions without a committed fund behind them. They are often former investment bankers or private equity professionals with the deal experience to source and execute transactions. They tend to target industries where they have prior expertise.

Unlike traditional PE, independent sponsors typically do not raise equity until they have identified a specific target. They work through various capital channels, including private equity firms, family offices, hedge funds, and pension funds.

Search Funds

The search fund model, which dates to 1984 and has grown in visibility in recent years, involves an MBA graduate, typically from a top business school, who raises capital from alumni and other backers to acquire and operate a profitable private company. Backers may include school alumni, faculty, and established debt partners. The MBA graduate serves as the operator post-close.

Key Takeaways

• Strategic buyers, including public companies, PE-backed platforms, and non-PE operators, account for the majority of home-based care deal volume.

• Strategic buyers can often pay more because they capture synergies a financial buyer cannot.

• Private equity typically pursues a roll-up strategy, building value through multiple acquisitions and then selling the combined platform at a higher multiple.

• Family offices and independent sponsors represent a smaller share of activity but can be flexible and competitive buyers for the right business.

• The type of buyer matters as much as the price: each brings different motivations, timelines, and expectations post-close.

• Working with an experienced M&A advisor can help you assess which buyers are realistic for your business and how to run a process that generates competitive tension.

Considering Your Options?

Understanding the buyer universe is one piece of exit planning. Knowing how to position your business within it, and how to run a process that surfaces the right buyers, requires a different kind of work.

Mertz Taggart has advised healthcare services owners for over twenty years, across hundreds of transactions in home health, home care, hospice, and adjacent services. If you are thinking about what comes next, a confidential conversation is a reasonable place to start.

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