top of page

Home Health, Home Care and Hospice Q3 M&A Report

Updated: Jun 9, 2023

Public Company Buyers Bolster Transaction Activity in Q3

Home health, home care, and hospice transaction activity remained relatively steady in the third quarter of 2019, according to the latest data from M&A advisory firm Mertz Taggart. Publicly traded companies largely led the way.

Overall, there were at least 29 home health, home care, and hospice transactions in Q3 2019, three more than the 26 total deals that transpired in Q2. This past quarter was the most active from a transaction perspective since the second half of 2018.

“We saw a lot more activity from the public companies like LHC Group Inc. (Nasdaq: LHCG) and Encompass Health (NYSE: EHC) this quarter,” Mertz Taggart Managing Partner Cory Mertz says. “In the recent past, private equity has really been the catalyst.”

Despite the active quarter, year-to-date deal volume is down through Q3 2019 compared to the same period last year (78 deals in 2019 vs. 95 in 2018). This is largely due to the drop in Medicare-certified transactions, which have declined by a substantial 30% through the first three quarters of 2019 (35 deals vs 50 in 2018).

Note: Total sector transaction data reported by Mertz Taggart is not equal to the sum of all individual sub-sector deals, as many sub-sector transactions fit into more than one category.

Home Health Care

Thanks to some of the big public companies, the home health care sub-sector saw an uptick in deal activity in Q3 2019.

In total, there were at least 13 deals for Medicare-certified home health assets in the most recent quarter – roughly in line with the 12 deals that took place in Q2. Lafayette, Louisiana-based LHC Group was responsible for at least six of those transactions during the quarter, as the home health giant continued to ramp up the joint-venture strategy it has historically hung its hat on.

Among its moves, for example, LHC Group announced in early August that it had finalized a joint venture (JV) expansion agreement in Missouri and formed a new JV partnership in Alabama — all while purchasing the assets of two home- and community-based services locations in Ohio.

“We are excited by this opportunity to expand our footprint in these important markets and provide quality in-home care for even more patients,” Keith Myers, LHC Group chairman, and CEO said at the time. “Providing quality service, for both our partners and the patients we serve together, is our highest calling.”

[Meanwhile, Addus HomeCare Corporation (Nasdaq: ADUS) was also notably active in Q3.

Among its deals, for example, the Frisco, Texas-based home care services provider announced it acquired Alliance Home Health Care LLC and affiliate House Calls of New Mexico. Addus additionally announced that it had purchased the operating assets of Foremost Home Care Inc.

The largest home health deal in Q3: Encompass Health’s $217.5 million play for privately owned Alacare Home Health & Hospice, finalized in early July.

Home health activity has remained steady with publicly traded companies likely due to 1) their familiarity and comfort with industry-shaping headwinds coming around the corner, including the Patient-Driven Groupings Model (PDGM), and 2) the availability of highly strategic targets. PE interest has likely dwindled slightly for the same reason, Mertz says.

“Right now, it’s hard enough for a PE firm to get a handle on the industry in general, but then to figure out how PDGM might impact a target is very difficult,” he says. “They have other opportunities they can look at for now until the dust settles in home health. I would look for private equity to jump back into the mix in the second half of 2020, barring any other unforeseen regulatory announcements.”

Home Care

On the non-Medicare home care front, Mertz Taggart tracked at least 10 transactions during the third quarter of 2019, up from the seven recorded in Q2. The 10 home care deals in Q3 were the most since the fourth quarter of 2018, which saw at least 12 transactions.

Arosa+LivHome — the PE-backed home care platform led by Ari Medoff — maintained its aggressive mentality, announcing in September that it agreed to buy care management company LifeLinks.

Arosa+LivHome currently operates in more than a dozen markets across California, North Carolina, Illinois, and Texas.

Similar to the home health sub-sector, Q3 saw fewer deals spearheaded by PE buyers, primarily due to a lack of attractive, scalable home care assets on the market.

“Why fewer PE platform deals?” Mertz says. “In the case of home care, it’s simply a lack of supply of investment-grade platforms, which require significant infrastructure in the way of management and resources to scale.”

Some organizations looking to scale home care networks have found creative solutions to this problem. For an example, look no further than the rapidly expanding ClearCare-Amedisys partnership announced in July.


The hospice landscape remains strong, with several interesting transactions taking place in the quarter.

In September, Dallas-based Three Oaks Hospice announced three acquisitions alone, using their recently acquired funding that they secured in May from a consortium of private equity groups. Three Oaks Hospice now has locations throughout the Dallas market, plus Fort Worth and San Antonio.

“While we’ve assembled an incredible team of experienced hospice executives — both in terms of compliance and growth — our greatest strength is the company’s ability to build a culture for caregivers who do the meaningful hands-on work every day,” Andrea Bohannon, CEO of Three Oaks Hospice, said in a statement.

Additionally, about a month prior to the Three Oaks Hospice news, St. Croix Hospice — a major hospice provider in the Midwest — announced the acquisition of Hometown Hospice & Homecare in Wisconsin.

St. Croix Hospice now operates across more than 220 counties in Minnesota, Iowa, Wisconsin, Nebraska, and Kansas.

There were at least ten hospice-related transactions in Q3 2019, down from the 14 deals that took place in Q2.

bottom of page