Q3 2022 Home Health, Hospice and Home Care M&A Update

Updated: Nov 7


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Home Health, Hospice & Home Care M&A Report Q3 2022

After experiencing a record-setting two years in Care-at-Home M&A, 2022 remains sluggish.


A few key facts illuminate this decline. One, fewer companies are going to market in 2022, compared with 2020 to 2021. “Transaction volume from late 2020 through 2021, relative to historical periods, was up almost 40%. This was driven by sellers trying to get their transactions closed before the then-pending capital gains tax rate increase. This never came to fruition, but the threat has loomed since the current administration took office, only subsiding in early 2022.” Mertz Taggart Managing Partner Cory Mertz commented.


Two, CMS’ proposed rule for home health activated a temporary slowdown in Medicare transactions, as providers tried to predict what reimbursement will look like in 2023. Now that the rule for 2023 is set, we should see an uptick in Q4.



A chart outlining home health, hospice, and home care M&A transactions by quarter

Note: Total industry transactions do not necessarily equal the sum of the sub-industries, as many transactions include more than one sub-industry.


Despite the overall downturn, the lower middle market — companies with enterprise values between $3 million and $100 million — hasn’t taken a significant hit. Private equity and strategic buyers continue to pursue quality home health, hospice and home care opportunities.


However, we are seeing the lower values in the public equity markets play out in several ways.


First, at the higher end of the market, meaning values over $100 million. Larger home health and hospice companies that would command mid-to high-teens multiples of EBITDA in 2020 and 2021 are not drawing that level of interest so far in 2022. (The exception, of course, is LHC Group’s pending sale to United/Optum, which is a highly-strategic acquisition of a publicly-traded company). Second, there is now less demand for private-duty companies.


“The usual consolidators are seeing demand for private-duty home care services softening across their networks, as individuals paying for these services are feeling the pinch in their financial portfolios, causing them to cut back on their hours,” Mertz says, “However, we are seeing this play out differently, depending on the geographic service area, with the more affluent areas less affected.”


Home Health M&A Slows


The third quarter saw the completion of 12 home health-related deals.


One of these deals was LHC Group Inc. (Nasdaq: LHCG) and the University of Maryland Medical System’s (UMMS) joint venture agreement in September. The collaboration will offer in-home healthcare services in parts of Maryland.


Additionally, LHC Group bought Eastman, Georgia-based Three Rivers Home Health. The deal is expected to create a $12 million revenue boost for the company.


Another notable deal was Searchlight Capital-backed Care Advantage’s purchase of National Home Healthcare in August. This was Care Advantage’s 16th acquisition since 2018. The company is mostly a personal care provider, but has been bullish about entering the home health space over the last few years.



a chart outlining Medicare certified home health M&A transactions by quarter

“We’ll finish 2022 down about 10% from historical periods as a result, but with a stronger Q4, now that the Home Health final rule has been set,” Mertz said.


Hospice M&A Leaps Ahead


As for hospice, 11 deals were completed in Q3. In August, H.I.G. Capital’s St. Croix Hospice acquired Corpore Sano Hospice in Plymouth, Michigan, the company’s second location in that state. St. Croix has been growth-focused over the past couple of years.


And in September, Ridgemont Equity-backed Agape Care Group bought GHC Hospice (GHC).


“Our team is excited to welcome the 135 new teammates from GHC Hospice joining Agape Care Group,” Troy Yarborough, CEO of Agape Care Group said in a press statement. “GHC’s track record of strong clinical quality, patient-centered focus, and reach into more rural communities enables us to connect with more patients and families with high-quality end-of-life care services in underserved geographies. This further expansion in Georgia and South Carolina strengthens our team and solidifies our position as a leading hospice and palliative care provider across the Southeast.”



A chart outlining hospice M&A transactions by quarter

Personal Care M&A Takes a Hit


Non-medical home care M&A saw 12 deals during the quarter, the third consecutive quarterly decline. Earlier this month, Trive Capital’s Choice Health at Home acquired Instant Care of Arizona Inc., while in September, Avera@Home established a joint venture with personal care provider Kore Cares.


“This is an essential part of the care continuum, especially as these patients are some of our most vulnerable,” Sandy Dieleman, CEO of Avera@Home said in a statement to the press.


“These services are vital in helping patients maintain their independence, especially as more and more of our population wants to age in place.”


In August, IL2M International Corp. closed its merger with Aamani Healthcare Group.



A chart showing home care M&A transactions by quarter







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