The Fog is Lifting: Why Hospice M&A is Racing Back in 2026:

Executive Summary: The Hospice M&A Pivot

• Record Volume: Q4 2025 recorded 16 hospice transactions, the highest quarterly volume since 2021.

• Platform Catalysts: Recent premium private equity platform transactions have reset valuation benchmarks and established new precedent multiples.

• Arbitrage Opportunity: Clear market data allows private equity and other financial sponsors to bid aggressively and still capture a healthy multiple expansion through a combination of strategic M&A and De novos.

• Strategic Resurgence: A more positive interest rate environment, and a narrowing valuation gap have shifted the market pendulum back toward sellers.

In the world of healthcare M&A, the last three years have felt like navigating through a heavy fog. Between rising interest rates and a persistent valuation gap, many owners chose to drop anchor and wait for clearer conditions.

But as we move into 2026, that fog has officially lifted.

The fourth quarter of 2025 recorded 16 hospice transactions—the strongest quarter we’ve seen in four years. As we noted in our Q3 2025 Home-Based Care M&A Report, the industry was already showing signs of a return to sanity, but this Q4 surge has officially signaled a broader market resurgence.

The Power of the "Known Multiple" and Precedent Transactions

The market doesn't operate in a vacuum; it needs a catalyst. A series of recent high-profile platform transactions over the past 6 months have fundamentally reset the industry’s compass.

While exact deal terms are often confidential, the multiples on these transactions are well-known within the private equity (PE) and buyer community. For each of these transactions, there were dozens of financial buyers that didn’t win the deal—and they are now using those precedent multiples to help inform their current bidding strategies.

Multiple Expansion Playbook

This new visibility has given private equity firms two specific incentives to jump back into the hospice space:

1. Arbitrage Visibility: PE firms now have a clear arbitrage map. They know that if they acquire regional agencies at current market rates and fold them into a sophisticated platform, they have a clear path to the frothy exit multiples proven by the previously mentioned recent platform trades.

2. The Add-On Engine: Once a PE group acquires a platform, they are often eager to sink their teeth into bolt-on acquisitions at lower “non-platform” multiples to help them both scale and lower their overall acquisition multiple. This is fueling a strong appetite for agencies in the $5M–$20M revenue range that provide geographic density.

The Tide is Turning: Interest Rates and Valuations

As Managing Partner Cory Mertz recently shared with Jim Parker at Hospice News:

"The past few years’ slump has been driven by a valuation gap where sellers hung on to 2021 expectations while buyers got more conservative. Since then, the gap has closed... and buyers have gotten more aggressive."

Fed Chair Jerome Powell announced three small rate cuts in 2025.  With a consensus that we will see another 2-3 rate cuts later this year, capital is becoming less expensive. For a buyer, even a small drop in rates changes the math, allowing them to stretch further on price for a high-quality, compliant asset.

Navigating the 2026 Horizon

The momentum from Q4 2025 is expected to carry directly into 2026, signaling a definitive shift in the market's direction. While sellers have moved past the 2021 "valuation hangover" to more realistic expectations, the real catalyst has been the buyers, who are once again eager to put capital to work.

"We are bullish on hospice M&A after a four-year slump," says Mertz. “However, the bar for program integrity has never been higher. Buyers are prioritizing agencies with clean clinical records and robust documentation, especially in 'hotspot' states under enhanced CMS oversight.”

For owners who have maintained a steady course and built clean, compliant, and scalable agencies, the market conditions have finally aligned. The slack tide has passed, and the pendulum has officially swung in your favor.