By Cory Mertz, Managing Partner | Mertz Taggart You've built something valuable. You know it. And apparently, so does the buyer who just reached out. Maybe it's a name you recognize, a PE-backed strategic that is targeting your market. They're complementary. They move fast. And somewhere in the conversation, they mention that working directly saves everyone the hassle of a process. Maybe even the fee. It sounds reasonable. It isn't. I've been advising home-based care agency owners on sell-side transactions for over 20 years and have closed more than 105 deals across multiple market cycles. The single most consistent finding: you cannot know what your company is worth until the market tells you. And the market can only tell you if you ask it. That's true whether you're running a $5 million agency or a $50 million one. Two deals illustrate why. Deal 1: Same Buyer, $2.2 Million More at Close A home care agency was approached directly by a well-capitalized strategic buyer. The buyer knew the market, liked the company, and moved quickly. Their offer: $6 million — $5 million at close and $1 million in an earnout tied to hitting a revenue threshold over the following 12 months. It wasn't a bad offer. But the seller engaged us instead of signing. We ran a process. The same buyer came back to the table. This time they agreed to $8 million — $7.2 million cash at close, with the remaining $800,000 tied to a 6-month revenue threshold rather than 12. The performance bar was lower. The window was shorter. The risk to the seller was significantly reduced. Same buyer. Same company. $2.2 million more cash at close — a 44% increase — and better terms. That $2 million didn't come from catching the buyer in a lie or finding hidden value in the financials. It came from the buyer knowing they weren't the only one at the table. Deal 2: A Larger Agency — From $14.5 Million to $30 Million A home health agency came to us with strong quality scores and financials. The sellers thought the company was worth about $14 million. We gave them guidance of $18–20 million, to which they were skeptical. The market validated our guidance, and then blew past it. Seven credible, well-capitalized strategic buyers submitted indications of interest ranging from $14.5 million to $25 million, clustering right around our guidance. Every one of them was a legitimate acquirer with real intent. Then competition took over. The buyers who stayed through the process submitted LOIs at $26.5 million and $27 million, already well above where they'd started. Then two of the strongest acquirers in the space entered a bidding war. The deal closed at $30 million. All cash. If that seller had responded to any single buyer directly — even the highest IOI at $25 million — they would have left millions behind. If they'd responded to the buyer at $14.5 million, they would have left more than $15 million on the table. Why the Spread Exists Buyers aren't dishonest when they approach you directly. They're doing their job. A direct deal is better for them — less competition, less process, less price pressure. What changes in a competitive process isn't the buyer's character. It's their behavior. When a serious buyer knows another serious buyer is in the room, they move. The LOIs in the larger deal came in above the IOIs specifically because both buyers knew they had competition. Neither would have gotten there on their own. That spread — $14.5 million to $30 million among qualified buyers looking at identical information — doesn't close because one buyer is more honest than another. It closes because of competition. One more thing this deal illustrates: never tell a buyer what you think your company is worth. The sellers came in at $14 million. If they'd shared that number with any of the buyers who approached them directly, they would have created a ceiling, and that ceiling would have cost them $16 million. It's Not Just Price Going direct doesn't only cost you on headline value. In a competitive process, buyers sharpen their terms too — faster timelines, cleaner deal structure, less holdback. When there's no competition, there's no urgency to be accommodating. The first deal above is a clean example: the earnout period dropped from 12 months to 6, the revenue threshold came down, and the cash at close went up — all because the buyer had to earn the deal. We've written more broadly about the risks of going direct here . The mechanics aren't complicated. What's harder to internalize — until you see a real deal — is how much you're leaving behind. A motivated buyer negotiating with a seller who has no alternatives will pay what they have to. Not what they could. Frequently Asked Questions If a buyer approaches me directly, should I respond?  You can have an initial conversation,  but don't share financials, don't name a price, and don't sign anything until you've spoken with an advisor. Engaging directly without running a process almost always means leaving money on the table. Does a competitive process work even if I already know who I want to sell to?  Yes. Competition changes buyer behavior regardless of your preference. In the deals above, the sellers' eventual buyers paid significantly more because they knew others were at the table — not because they were the only option. What if the buyer says the offer expires if I hire an advisor?  That's a pressure tactic. A buyer who walks away because you ran a process was never going to give you their best number to begin with.

Introduction The Veterans Administration (VA) has long been considered a ‘payer of last resort’ for home care providers, offering below-market rates and slow pay for services to our veteran community that deserves better. As a result, this business line has often been viewed as important, but not desirable for home care operators, resulting in low M&A interest from industry consolidators. That changed in 2018 with the passage of the VA Mission Act of 2018 . This federal law aimed to enhance veterans' access to healthcare services within the VA system and through community care providers. Of particular interest to home-based care providers, the act replaced the Veterans Choice Program with the new Community Care Program . Community Care Program The new Community Care Program expanded the eligibility criteria for veterans, provided more stable funding, improved the program’s long-term sustainability, and standardized and streamlined access requirements to receive care. Additionally, the Act established the Community Care Network (CCN), which serves as the contract vehicle for the VA to “purchase” community care from community healthcare providers for veterans. The CCN established agreements with two third-party administrators (TPA), Optum Public Sector Solutions, Inc. (Optum), part of UnitedHealth Group, Inc. and TriWest Health Care Alliance (TriWest) and divided the country into five different regions: The TPAs are responsible for developing and administering the CCN within their assigned geography. Their scope of work includes the following: Provider Network Management: Establish and maintain networks of community healthcare providers, such as home care or home health providers. Appointment Scheduling: Help coordinate appointment scheduling for veterans. Claims Processing: Handle claims processing and payment from community healthcare providers. Authorization and Coordination : Assist in obtaining authorizations for medical services that veterans need from community providers and ensure necessary documentation is in place. Quality Assurance : Monitor the quality of care. Communication : Facilitate communication between the VA, veterans, and community healthcare providers. In order for a home-based care provider to provide services to veterans and get reimbursed for it, it needs to: Establish a contract with a TPA : This involves executing an agreement and going through certain credentialing. Build relationships with local VA representatives: This should be in the form of high-quality and timely care. Billing: Submit proper billing through established protocols and online portals Receive payment or follow up on unpaid claims: As with any payer, providers will need to follow up with TPAs on unpaid claims, but the majority of the time this will be due to minor and easy-to-fix issues Attractive Reimbursement In addition to the improved and more efficient Community Care Program, the VA also has attractive reimbursement rates for home-based care services: Personal Care Services: The rates for personal care services depend on the state/city/market serviced, but the majority will be in the low $30’s/hr. Home Health and Hospice Services: VA will reimburse at Medicare rates. Investor Interest Investors have caught wind of the improvements in the VA healthcare ecosystem and have developed a strong interest in home-based care providers that service veterans. Below are some of the reasons for the renewed investor interest: Payor Diversification : Increasing the number of payors reduces the risk that a certain payor will lower rates, stop reimbursement, change material terms in agreements, etc. High Reimbursement Rates: Current reimbursement rates are on the high end for home-based services. Uncertainty Other Payors: Private Pay: Concerns with the state of the economy could inhibit clients’ ability to pay high rates Medicaid: CMS’s proposed Medicaid Access Rule requiring providers to pass 80% of reimbursement to direct care workers jeopardizes the feasibility of the different state programs. Medicare: Looming proposed rate cuts increase risk Value-based Care Opportunities: An additional payor means an opportunity to care for more individuals, have more leverage when negotiating contracts, and capture higher-margin health services. “We are hearing more from strategic buyers interested in adding VA to their existing Medicaid home and community-based services business,” Mertz Taggart Managing Partner Cory Mertz said. “It’s a perfect complement to that business line. The models are very similar, payer diversity reduces risk, especially in light of the proposed 80/20 rule, and the current reimbursement rates are strong.” M&A Market For Home-Based Care Providers Servicing Veterans The strong investor interest in home-based care providers that service veterans and receive reimbursement through TPAs has increased the demand and value of these assets. Resources: VA Community Care Network VA Mission Act of 2018 VA Disability Calculator VA Disability Appeals Additional Veteran Resources As part of our commitment to supporting veterans and their families, we are pleased to share some valuable resources provided by Hill & Ponton , a law firm dedicated to advocating for veterans who have been denied benefits by the VA. These resources are designed to assist veterans in navigating the challenges they face, particularly in relation to mental and physical health issues. PTSD Guide :  A comprehensive resource tailored to assist veterans coping with post-traumatic stress disorder. 2024 Disability Calculator :  An up-to-date practical tool for evaluating disability compensation eligibility. Toxic Exposure Map :  A helpful tool designed to help veterans navigate potential exposure risks. Blue Water Navy Map :  An interactive Vietnam map for navigating exposure to Agent Orange. We believe these resources will be highly beneficial to our readers, offering practical tools and information to better manage the challenges that veterans often face.

By Michael Lloyd The convergence of unique market factors has created an opportunity for owners of home-based care businesses in the lower middle market. The major contributing factors in the market are rising interest rates [ML1], which are causing private equity to delay their exits on platform investments, and a scarcity of quality assets currently on the market. In other words, large private equity-owned businesses cannot fetch the terms and values they want in the 100M+ market due to interest rates, so they are forced to continue investing in their businesses by acquiring assets that fit their strategy. “The top has come off the higher end of the market, forcing private equity portfolio companies to delay their exits for now. In terms of multiples, these larger companies that would have sold a couple years ago in the mid- to high-teens are not commanding that right now. Transactions that size tend to be more highly leveraged, which will ultimately weigh down valuation,” Mertz Taggart Managing Partner Cory Mertz said. “But private equity has a mandate to spend the piles of cash they are sitting on, so that’s what their portfolio companies are doing right now. Or at least they are trying to.” The issue for these strategic buyers and opportunity for owners (sellers) lies in the availability or lack thereof of quality assets currently on the market. Although home-based care M&A ticked up in Q2(see report) , Q1(see report) recorded near-historic lows for completed transactions, and it appears Q3 will follow suit. “Transaction volume right now is, for the most part, a function of quality opportunities in the marketplace,” Mertz added. Healthy businesses with EBITDA numbers between $1 million-$10 million have benefited from these conditions. In a market where assets are more readily available, these companies may not garner the same level of interest or demand as they are currently getting. Consistently, in a competitive process, owners are capitalizing on this demand by exceeding valuation expectations. While values hold firm, the buyers are increasingly disciplined in diligence due to the general sense of uncertainty and historically high values. It is essential that owners are stringent with compliance and manage margins to capitalize on the values being offered. “We will almost always recommend our clients perform some level of a compliance audit and quality of earnings before going to market,” Mertz said. “It costs money, so it can be a tough pill to swallow for owners, but it will give them insight into how the buyer will ultimately size up the company. It’s better to know that before jumping into a months-long sale process.”

The healthcare mergers and acquisitions (M&A) marketplace is undergoing a dynamic transformation, driven by shifting industry trends, heightened scrutiny on asset quality, and the strategic pursuit of value-based care. These developments were the focus of our recent webinar series, Home Health & Hospice M&A – Webinar Series , where industry experts shared actionable insights and strategies to navigate today’s M&A environment effectively. Hosted by Jennifer Maxwell , the discussion featured insights from Cory Mertz , managing partner at Mertz Taggart, and Jay Duty , COO at Maxwell Healthcare Associates. The session provided a comprehensive exploration of the latest M&A trends, challenges, and forward-looking opportunities in home health and hospice care. Here are the key takeaways that can shape your approach to M&A in this evolving marketplace. Emerging Trends Shaping Healthcare M&A A Post-Pandemic Reset The COVID-19 pandemic significantly altered the M&A landscape. After a slowdown during the early stages of the pandemic, a surge in transactions followed, fueled by low interest rates and government stimulus. However, rising inflation and higher borrowing costs have shifted priorities. Buyers are now more discerning, focusing on assets with robust financial and operational performance. Increased Demand for Quality Assets Today’s buyers prioritize quality over quantity. Clinical and operational efficiency, data-driven insights, and a clear demonstration of value are critical factors. Sellers must prepare thoroughly, ensuring their businesses meet these elevated standards to stand out in a competitive market. Strategic Considerations for M&A Success Adapting to Consolidation Trends The move toward value-based care is a driving force behind healthcare consolidation. Strategic buyers aim to enhance existing operations and expand service lines through acquisitions that align with their long-term objectives. Optimizing Margins and Metrics Private equity firms are continuing to target high-quality assets with strong margins and scalable operations. As competition intensifies, sellers must ensure their business metrics and processes are optimized to attract top-tier interest. Preparing for Market Success Proactive Operational and Financial Planning Preparation is paramount in today’s M&A environment. Conducting thorough operational assessments, optimizing revenue cycle management, and addressing inefficiencies are critical steps for enhancing valuation. Sellers who invest in readiness build buyer confidence and mitigate transaction risks. Early Exit Strategy Development Successful exits don’t happen overnight. Engaging with M&A advisors and consulting firms well before a potential sale can provide actionable guidance to improve operational metrics and unlock hidden value. Understanding your business’s unique strengths ensures a stronger position during negotiations. Opportunities on the Horizon Data and Technology as Growth Enablers Data collection and analysis are increasingly pivotal. Organizations leveraging patient outcome data can strengthen relationships with payers, ACOs, and Medicare Advantage plans while improving operational efficiency. Service Integration for Value-Based Care Innovative service offerings, such as infusion therapy and physician-at-home care, are becoming essential to building comprehensive care portfolios. Integrating these services into value-based care contracts enhances profitability and market appeal. Key Takeaways for Sellers Plan Ahead : Begin preparing for a sale early. Building operational readiness and addressing inefficiencies takes time but delivers substantial returns. Leverage Expert Guidance : Engage M&A advisors and consultants to maximize asset value and navigate the transaction process effectively. Understand Your Unique Value Proposition : Clearly articulate your market position and competitive advantages to stand out during buyer evaluations. Optimize Financial and Operational Metrics : Ensure strong EBITDA margins and operational efficiencies to attract premium valuations. Looking Ahead With interest rates stabilizing and private equity poised for increased activity, the healthcare M&A marketplace is on the brink of renewed momentum. Organizations that prioritize preparation, operational efficiency, and strategic alignment with market trends will be best positioned to thrive in this competitive landscape. If you are interested in watching the entire Navigating the M&A Landscape: Key Trends and the Role of Advisors webinar, you can find it on our YouTube channel! If you are contemplating an eventual sale of your home-based care agency, feel free to contact us at info@mertztaggart.com to arrange a confidential discussion about your exit strategy!

Home-based care M&A activity held steady in Q1 2026, with 22 transactions closed during the quarter — continuing the momentum from last year's rebound . Seven additional deals were announced but not yet closed as of quarter-end, signaling a healthy pipeline heading into the second quarter. Hospice led all sub-sectors with 10 closed transactions, followed by home care at 9 and home health at 6. Cory Mertz , managing partner at Mertz Taggart, noted: "Q1 2026 was an encouraging start to the year. We're seeing more sponsors reach the point where they need to transact — some of these platforms have been held for five, six, seven years, and the pressure to return capital to LPs is real. The clock is ticking on a lot of these funds, and buyers are active. We expect deal volume to continue building through Q2 and into the back half of the year." Home-Based Care M&A Note: Total industry transactions do not necessarily equal the sum of the sub-industries, as many transactions include more than one sub-industry. The 22 closed transactions in Q1 2026 were driven by sponsor-backed activity across all three sub-sectors. Home care and hospice each contributed double-digit deal counts on a combined basis, while home health showed modest improvement from the multi-quarter lows seen through much of 2024 and early 2025. Cory Mertz added: "The announced deals this quarter tell the real story. Elara Caring, Enhabit, TEAM Services, Aveanna/Family First — these are meaningful transactions that reflect growing conviction from both buyers and sellers." Home Health M&A   Home health activity improved in Q1 2026, with 6 total transactions — including 1 new platform and 5 sponsor-backed add-ons — up from 3 in Q4 2025 and the best quarter for the sub-sector in over a year. The quarter's headline deal was the announced acquisition of Enhabit Home Health & Hospice  by Kinderhook Industries  for $1.1 billion, representing a 10.2x EBITDA multiple on $108 million of EBITDA and $1.06 billion in revenue. Enhabit had been publicly traded since spinning out of Encompass Health in 2022 and had spent much of its time as a standalone company navigating reimbursement headwinds and investor skepticism about Medicare home health. The Kinderhook deal delivers a 24% premium to Enhabit's share price at announcement and nearly 34% to the 60-day average — the kind of outcome that speaks for itself. Cory Mertz offered this perspective: "The Enhabit deal is a good reminder of why we don't lead with multiples. Shareholders received a 24% premium to market and nearly 34% to the 60-day average — real value by any measure. But if you just read '10.2x EBITDA' in a headline, it sounds unremarkable. The multiple is an output, not the goal. For Enhabit's board, the goal was maximizing value for shareholders and getting the company out from under the quarterly earnings spotlight — both of which this transaction accomplished." Also announced — but not yet closed — was Ares Management's  (alongside DaVita ) strategic investment in Elara Caring , the large national home health, hospice and personal care platform formed in 2018 from the three-way merger of Great Lakes Caring, National Home Health Care and Jordan Health Services. Blue Wolf Capital had held the asset for nearly eight years — an unusually long hold period by private equity standards — navigating a difficult regulatory environment, a $4.2 million DOJ settlement in 2024, and a home health reimbursement landscape that kept many large-platform exits on hold. DaVita disclosed an approximately $200 million minority investment alongside a majority investment from Ares, with Elara continuing to operate as an independent company. The strategic rationale centers on co-developing a kidney-specific in-home care model, leveraging DaVita's clinical expertise to reduce preventable hospitalizations and lower total cost of care for patients with kidney disease. Among closed deals, Choice Health at Home  added Cyfair Healthcare  in Texas and Alliant Home Health  in back-to-back transactions, extending its multi-state footprint. Residential Healthcare Group  acquired Covenant Home Health  to deepen its presence in eastern Pennsylvania, and Superior Health Holdings  closed on Pulse Home Health & Hospice . Also announced was Aveanna Healthcare's  agreement to acquire Family First Homecare  for $175.5 million. Family First is a pediatric home care provider focused on skilled private duty nursing, operating 27 locations across seven states including Florida and Texas. The deal expands Aveanna's specialized pediatric footprint and reinforces its strategy of building scale in medically complex, high-cost patient populations. Hospice M&A Hospice maintained its position as the most active sub-sector in Q1 2026, with 10 closed transactions — including 5 sponsor-backed strategic add-ons. This is consistent with the record activity seen in Q4 2025 and confirms hospice as the preferred target for both strategic and financial buyers in the current environment. Notable transactions include Uplift Hospice's  purchase of Autumn View Hospice  in Georgia, continuing the platform's active acquisition streak. On the not-for-profit side, Chapters Health System  announced another transaction in its acquisition of HouseCall Providers , a Portland, Oregon-based organization offering home health, hospice and palliative care services across the Pacific Northwest. Hospice of Southern Maine  announced the pending acquisition of Andwell Health Partners , and VNA of Texas  completed the acquisition of Faith Presbyterian Hospice . Heart to Heart Hospice  continued its add-on pace with the acquisition of a former Cura-HPC  location in Oklahoma City. Kara Health  launched a joint venture with Loma Linda University Health  to form Loma Linda University Hospice , expanding Kara's health system partnership model into the Inland Empire region of California. Cory Mertz noted: "Hospice M&A has been on a run, and we don't think it's over. The activity we saw in Q4 2025 and Q1 2026 is being driven by real demand from buyers and growing willingness from owners to engage. A few precedent platform transactions were received well in 2025, and that fuels more PE interest in the space — which drives demand for all hospice agencies, large and small. For hospice operators who are thinking about a sale in the next one to three years, the current environment rewards preparation — particularly around billing compliance and documentation." Home Care M&A Non-medical home care contributed 9 closed transactions in Q1 2026, including 5 sponsor-backed strategic add-ons and 1 new platform. While slightly below the elevated levels seen in Q1 and Q2 2025, activity remained healthy and the announced deal pipeline points to continued momentum. The quarter's most notable announced transaction was General Atlantic's  acquisition of TEAM Services Group , one of the largest Medicaid-focused home and community-based services providers in the country, from Alpine Investors , which had built the platform through more than a decade of aggressive add-on activity since forming the company in 2015. The deal, backed by $1.38 billion in financing, closed in early Q2 — but its announcement during the quarter is a meaningful signal of continued large-platform appetite in the home care space. Among closed deals, Care Advantage  acquired the Delaware locations of Neighborly Home Care , HouseWorks HomeCare  added A Caring Experience Nursing Services  in the Northeast, and PurposeCare  added Freedom Home Care  to its expanding portfolio. Choice Health at Home  continued its aggressive add-on pace, closing on Florida-based Senior Nannies Home Care Services  in addition to its home health transactions this quarter. Q1 also saw two home care franchise networks change hands: Main Post Partners  established a new platform with the acquisition of HomeWell Franchising , and Dovida , a global home care provider operating across six international markets, made its U.S. market entry with the acquisition of A Place At Home , a franchise network with approximately 55 locations across 27 states. Cory Mertz noted: "Home care is still very much in play. We have a number of sponsor-backed platforms that have been building for several years and are getting close to exit-ready, and buyers — including some we haven't seen active in a while — are showing renewed interest." If you are interested, you can also download the .PDF version of the Q1 2026 Home-Based Care M&A Report via the following link:

Mertz Taggart follows the publicly traded home-based care companies and reports on their earnings calls each quarter. As a group, public company performance and share price serve as a proxy for industry performance and investor sentiment, respectively. Historically seen as the “ultimate consolidators”, the publicly traded home-based care trading multiples have a downstream effect on lower middle market home-based care M&A. Addus Homecare (Nasdaq: ADUS) Highlights Addus reported revenue of $373.1 million for the quarter, up 26% from Q4 2024. Growth was led by the Personal Care segment, representing 77% of the business, which grew same-store revenue by 6.3% and overall revenue by 30% year-over-year compared to the prior year quarter. The segment benefited from stable hiring trends and favorable rate support in large markets including Texas and Illinois, the company’s two largest markets. The Hospice segment, making up 19% of quarterly revenue, experienced 16% year-over-year same-store growth as a result of operational improvements which saw increases in admissions, average daily census and revenue per patient day. The segment also benefited from a 3.1% increase in the 2026 Medicare hospice reimbursement rate which came into effect on October 1. The company’s Home Health segment, which represents 5% of the business, saw a 7% decline in same-store revenue year- over-year, but still remains a critical piece of Addus’ full continuum of care. 25% of the Hospice segment’s admissions in New Mexico and Tennessee are attributable to the company’s Home Health business. Addus ended full-year 2025 with revenue of $1.4 billion and adjusted EBITDA of $180 million, an increase of 23% and 28%, respectively, from 2024. Key Financial Figures M&A Activity CEO Dirk Ellison commented, “Our development team continues to focus on both clinical and non-clinical acquisition opportunities which would increase both density and geographic coverage. We will continue our disciplined approach to identify strategic personal care service transactions as well as to evaluate smaller clinical transactions. That said, while there is more optimism around home healthcare due to the final health rule for 2026 being more favorable than was originally proposed, questions remain about potential future rate increases and the uncertainty of the retrospective payment adjustments.” Management clarified that they will continue to source and evaluate acquisition opportunities similar to the ones closed so far this year, with a focus on markets where Addus can leverage its strong personal care network. Guidance Management expects a sequential gross margin decline of 120 basis points from normal seasonality, annual merit increases and the annual reset of payroll taxes. A 3.9% rate increase in Illinois that came into effect on Jan 1 is expected to add $17.5 million in annualized revenues in 2026. Aveanna Healthcare (Nasdaq: AVAH) Highlights Aveanna reported Q4 2025 revenue of $662.5 million, up 27% year-over-year, and Q4 2025 adjusted EBITDA of $85 million, representing a 54% increase over the prior year quarter. Management attributed this growth to an improved reimbursement rate and volume environment and the continued success of cost savings initiatives. The Private Duty Services segment, representing 82% of the business, grew 28% year-over-year driven by an 18% year-over-year increase in volume and a 10% increase in revenue per hour as a result of the company’s preferred payor strategy and other Medicaid rate enhancements. The Home Health & Hospice Segment, which represents 10% of the business, grew 27% year-over-year. The business line saw 10,400 admissions and 14,000 total episodes of care during the quarter, up 22% and 25% over the prior year quarter, respectively. Aveanna continues to expand its preferred payor strategy, ending 2025 with 30 preferred payor agreements, up from 22 at the end of 2024. Q4 2025 preferred payor volumes accounted for approximately 57% of total MCO volumes in its Private Duty Services business. Key Financial Figures M&A Activity Aveanna announced the acquisition of Family First Homecare, a multi-state provider of pediatric home care with 27 locations, for $175.5 million or approximately 7.5x post-synergy EBITDA. The transaction is expected to close in late Q2 2026 pending regulatory approvals. CEO Jeff Shaner noted the deal allows Aveanna to expand within Florida, where Family First generates approximately two-thirds of its revenue, enabling the company to service effectively every county in the state. Management signaled continued interest in M&A with plans to pursue tuck-in acquisitions for its Home Health & Hospice segment. Management also identified Ohio, West Virginia, Kentucky and Tennessee as target expansion states for the company’s Private Duty Services business. Guidance Aveanna guided to full-year 2026 revenue between $2.54 to $2.56 billion and adjusted EBITDA of $318 to $322 million, excluding any impact from the Family First acquisition, implying core EBITDA growth of approximately 7%. Management expects six to eight state rate enhancements in its Private Duty Services business in 2026, with increases expected to be between 1% to 5% rather than the larger structural resets of prior years. The Pennant Group, Inc. (Nasdaq: PNTG) Highlights P ennant Group reported Q4 2025 total revenue of $289 million, an increase of 53% over the prior year quarter, driven by growth in all three of its operating segments. Full-year consolidated revenue and adjusted EBITDA came in at $948 and $72 million, up 36% and 20% from 2024, respectively. The Hospice segment, representing 34% quarterly revenue, grew 53% year-over-year driven by a 47% increase in average daily census, reaching an all-time high of 5,060. Same-store ADC and admissions grew 8.4% and 6.6%, respectively. The Home Health segment, inclusive of Home Care revenue, grew 73% year-over-year and saw an 81% surge in quarterly admissions, driven by the company’s recent acquisition of divested assets from UnitedHealth Group and Amedisys. Same-store Medicare admissions and Medicare revenue per episode grew 8.2% and 3.7%, respectively. Throughout 2025, Pennant Group added more than 100 leaders to its CEO in Training program and elevated an additional 39 leaders to C-level status within their local operations, strengthening the company’s talent bench for M&A integration and organic expansion. Key Financial Figures M&A Activity Pennant Group continues to integrate the divested assets it purchased from the UnitedHealth Group and Amedisys transaction, which added significant density in the Southeastern market. Management expects to complete the integration by October 2026. The company closed two Senior Living acquisitions during the quarter, including a 55-bed Idaho-based assisted living community now known as Twin Rivers Senior Living and the real estate of Honey Creek Heights Senior Living, a 135-bed Wisconsin-based assisted living community that previously sold its operations to Pennant Group in January 2025. Commenting on M&A expectations going into 2026, President and COO John Gochnour said, “We are always disciplined in our approach, but we will be even more selective on the Home Health and Hospice front in the first half of 2026, as we focus on ensuring our recently acquired operations are on firm footing.” Guidance Management issued initial full-year 2026 guidance of $1.13 to $1.17 billion in revenue and $88.5 to $94.1 million in adjusted EBITDA. CFO Lynette Walbom characterized the guidance as conservative, as management expects noise from integration in the first three quarters of the year. Enhabit, Inc. (Nasdaq: EHAB) Highlights Enhabit reported quarterly revenue of $270 million, representing a 5% increase from the prior year quarter, and adjusted EBITDA of $28 million. The company’s Home Health segment, which makes up 76% of the business, grew 3% year-over-year driven by admissions growth of 7.3% or 8.1% when normalized for branches closed in 2025 and average daily census growth of 6.4% compared to the prior year. Medicare average daily census continues to stabilize as it fell 1.7% sequentially. The Hospice segment, representing the remaining 24% of the business, grew 10% year-over-year led by a 9.9% increase year-over-year in average daily census. Admissions increased 0.8% year-over-year or 3% when normalized for branches closed in 2025. Enhabit opened four de novo locations during the quarter, bringing the total to 10 de novo locations in 2025. The company continued to de-lever its balance sheet during the quarter with a reduction in bank debt by $15 million, yielding a leverage ratio of 3.7x. The company has reduced total bank debt by $125 million since Q4 2023, resulting in an annualized cash interest savings of $22 million. Key Financial Figures M&A Activity On February 23, 2026, Enhabit announced that it had entered into a definitive agreement to be acquired by Kinderhook Industries, a middle market private equity firm, for $13.80 per share or a total enterprise value of $1.1 billion, representing a premium of approximately 24.4% to the company’s closing share price as of February 20 or a 33.8% premium to Enhabit’s 60-day volume-weighted average share price for the period ending February 20. The transaction is expected to close during the second quarter of 2026, subject to regulatory approvals and other closing conditions. In a press release, President and CEO Barb Jacobsmeyer commented, “Under Kinderhook’s ownership, Enhabit will benefit from additional resources and expertise that will support long-term investments in our people, clinical excellence and innovation without the short-term pressures of the public markets.” Guidance As a result of its pending acquisition by Kinderhook Industries, management has suspended its practice of providing financial guidance. BrightSpring Health Services, Inc. (NASDAQ: BTSG) Highlights BrightSpring delivered total Q4 2025 revenue of $3.6 billion, up 29% from the prior year quarter. Full-year 2025 revenue came in at $12.9 billion, a 28% year-over-year increase, while the company achieved a full-year adjusted EBITDA of $618 million, a 34% increase from 2024. Pharmacy Solutions, which represents 89% of the business, grew revenue 32% year-over-year to $3.2 billion. Within the segment, Infusion and Specialty revenue grew 43% to $2.6 billion while the Home and Community Pharmacy service line’s revenue declined 1% to $593 million, reflecting the unwinding of a bankrupt customer and the exit of uneconomic accounts. Provider Services, representing 11% of the business, reported quarterly revenue of $394 million, up 13% year-over-year, with a segment adjusted EBITDA margin of 16.4%, a 50-basis point expansion driven by economies of scale and efficiency. The Home Health Hospice and Primary Care businesses, which represents 55% of the Provider Services segment, grew revenue 19% year-over-year driven primarily by a 15% increase in average daily census. Key Financial Figures M&A Activity BrightSpring closed its acquisition of 107 Amedisys and LHC branches in a two-part transaction on December 1 and December 31, 2025, at a purchase price of $239 million funded entirely from cash on hand. The assets generated full-year 2025 pro forma revenue of $345 million and are geographically complementary to BrightSpring’s existing Home Health and Hospice footprint. Management expects the acquired assets to contribute approximately $30 million in adjusted EBITDA in 2026. The pending divestiture of the company’s Community Living business received FTC approval and is expected to close by the end of Q1 2026. The transaction will generate approximately $715 million in net after-tax cash proceeds from $835 million in gross consideration, with proceeds earmarked primarily for debt repayment. CEO Jon Rousseau reiterated BrightSpring’s intention to continue pursuing thoughtful tuck-in acquisitions in 2026 commenting, “The hallmarks of the company now for 10 years has been volume and efficiency and then accretive M&A. That story has really never been more intact.” Guidance Management issued initial 2026 guidance of $14.45 to $15.0 billion in total revenue, inclusive of Pharmacy Solutions revenue of $12.6 to $13.1 billion and Provider Services revenue of $1.85 to $1.9 billion. Total adjusted EBITDA is expected to be between $760 and $790 million. Option Care Health, Inc. (NASDAQ: OPCH) Highlights Option Care reported full-year 2025 net revenue of $5.6 billion, up 13% over the prior year, driven by balanced growth across acute and chronic therapies. Acute revenue grew in the mid-teens while chronic therapies saw low double-digit growth. Stelara biosimilar adoption represented a full-year 2025 revenue headwind of 160 basis points, impacting Q4 2025 gross profit negatively by $20 million, consistent with management’s expectations. Full-year adjusted EBITDA came in at $471 million, representing a 6% increase over the prior year, with a margin of 8.3%. Throughout 2025, the company added five new site-of-care programs with regional health plans and two with non-traditional payors. Management noted increasing payor engagement around total cost of care and MLR management, with momentum expected to continue into 2026. Option Care served over 315,000 unique patients in 2025, an all-time high, and completed over 2.5 million infusion events. Over 25 centers now offer advanced practitioner capabilities, up from 24 in Q3 2025. Approximately 40% of claims are now processed without human intervention through AI and automation initiatives. The company is expanding AI use cases into call center agentic capabilities, workforce optimization and inventory management. Key Financial Figures M&A Activity While discussing the company’s M&A strategy, CFO Meenal Sethna commented, “We remain active on identifying complementary tuck-ins and adjacencies. We acquired Intramed Plus earlier in the year, and the business and financial performance beat our initial expectations. We will continue to exercise discipline as we evaluate potential acquisitions, ensuring they are both strategic and financially attractive.” Guidance Management reaffirmed full-year 2026 guidance initially provided in January of $5.8 to $6.0 billion in revenue, adjusted EBITDA of $480 to $505 million and operating cash flow of at least $340 million. Option Care’s revenue guidance incorporates a 400-basis point headwind from biosimilar adoptions such as Stelara. To download the .pdf version of this report, click below. Disclaimer The information contained in this document is provided for informational and marketing purposes only by Mertz Taggart and is not intended as investment, financial, legal, tax, or other professional advice. The content has been compiled using publicly available sources, including but not limited to SEC filings accessed via EDGAR, Seeking Alpha, and Yahoo Finance.  While we strive to ensure the accuracy and reliability of the information presented, Mertz Taggart does not warrant or guarantee the completeness, timeliness, or accuracy of the information, nor shall it be held liable for any errors or omissions.  This document does not constitute a solicitation, recommendation, or offer to buy or sell any securities or other financial instruments. Any views or opinions expressed are those of the author(s) and do not necessarily reflect the views of Mertz Taggart or its affiliates. Recipients should not rely solely on the information herein for making investment or strategic decisions. All readers are encouraged to conduct their own independent research and to consult with their professional advisors before making any financial or business decisions. All trademarks, logos, and brand names mentioned are the property of their respective owners and are used in this document for identification purposes only.

By Cory Mertz, Managing Partner | Mertz Taggart Adapted from a conversation on the Home Care Strategy Lab podcast with Miriam Allred I’ve been doing healthcare M&A since 2006. In that time, I’ve worked with hundreds of home care, home health, and hospice companies. Big ones, small ones, great ones, struggling ones. And one of the things that still surprises people when we sit down together is this: you can have a really nice company that’s not very valuable in the marketplace. That’s not a criticism. It’s just reality. What makes a company great to run and what makes a company attractive to a buyer are two different things. A lot of owners do not realize that until they are much closer to a transition than they should be. That was one of the themes I recently discussed with Miriam Allred on the Home Care Strategy Lab  podcast. We covered valuation, market trends, transition risk, and the blind spots owners often miss until a sale feels real. And if there is one point worth emphasizing, it is this: some of the best transactions do not start when an owner decides to sell. They start years earlier. Every business will transition. Every owner is going to transition out of their business at some point. How that happens could be a lot of different ways. It could be a sale. It could be a family succession. It could be a merger. But it’s going to happen. What tends to drive those decisions is not always strategy. More often, it is life. Burnout. Health issues. A child who was excited about taking over the business five years ago but isn’t anymore. The market peaking and an owner thinking, “maybe now’s the time.” We see all of it. The owners who end up in the best position aren’t the ones who scramble when a life event hits. They’re the ones who’ve been paying attention to what their company is worth in the market long before they’re ready to do anything about it. The most common blind spot I’d say the most common blind spot is owners not understanding how the M&A market would actually look at their company. Not how they see it. How buyers see it. Buyers are evaluating how sustainable the cash flow is, how transferable the business will be after a sale, how it fits into the broader market, and how much risk they believe they are taking on. Take niche businesses as an example. Maybe you serve a very specific patient population and you have built something unique around that. That may be great for your operation. But from a buyer’s perspective, they need to know two things: is it sustainable, and when they eventually exit, is that uniqueness going to be marketable to the next buyer? The biggest acquirers in the market tend to do business in fairly similar ways. Similar margin profiles. Similar technology adoption. Similar structures. If your company is an outlier, even a high-quality outlier, it may not command the value you expect. The Diversification Myth The impact of diversification on company valuation can be uncertain. It may limit the pool of potential buyers. Similarly, when business owners hear about diversification, they often feel compelled to expand their offerings by adding more payers, service lines, and geographic locations. However, if your organization is already providing a range of services such as private duty, Medicaid, VA, and skilled work all under one roof, you may find that there are few buyers who excel in all these areas. Excessive diversification can complicate a company's evaluation process and make it more challenging to sell. You want diversity, but you want it in the right way. Multiples are the most misunderstood concept in M&A People love to talk about multiples. What’s the going rate? What are companies selling for? The problem is, the multiple isn’t an absolute number. It’s subjective. For any given deal, you can calculate a handful of different multiples, and they can vary quite a bit depending on what earnings figure you are using and what time period you are looking at. Here is a simple example. A $20 million company with an average EBITDA of $2 million over the last three years is a 10x multiple. But if the last four months show a $4 million run rate, now that same deal looks like a 5x. Same company. Different lens. That is one reason owners can get misled when they hear that another company sold at a certain number. Without understanding the details behind the deal, the number by itself does not tell you much. At its core, the multiple is about risk. The higher the multiple, the lower the perceived risk that cash flow will hold up after closing. The lower the multiple, the more risk the buyer is absorbing. That risk comes from everywhere: geography, reimbursement exposure, the strength of the management team, whether the company is growing or declining, whether the owner does everything themselves or has a team that can stand on its own, culture, technology, timing. Two companies that look similar on paper can command very different multiples once you drill into the specifics. That’s why comparables only tell you so much. The risk factor buyers fixate on most If there is one risk factor buyers consistently focus on, it is transition risk. How involved is the owner in the day-to-day? If they’re doing everything, the transition risk is high. What does the first layer of management look like? How likely are those key people to stick around after a sale? We recently took a hospice company to market. Great business. Strong management team. We went through six management discussions with buyers, the kind of multi-hour meetings where they really get to know the people, the culture, and how the company operates. Our client did a terrific job. Even so, two buyers dropped out. Why? They saw risk factors the other buyers did not. That is how subjective this process can be. What is a dealbreaker for one buyer may be a non-issue for another. It’s also why you want multiple buyers at the table. It is hard to gauge the market by talking to one buyer, or even a few. In home-based care alone, we track roughly 140 strategic acquirers, and they do not all see the same company the same way. The three things you can actually manage When we sit down with an owner, we break valuation into three manageable pieces: revenue, margin, and the multiple. Revenue  is straightforward — every agency has to grow if they want to command a higher value. We help owners put a plan together and connect them with the right people to get there. Margin  is where it gets more nuanced. If your margin is too thin, you may be leaving money on the table. But if it’s too high, that can also raise concerns. A 30% or 40% adjusted EBITDA margin may look great from the owner’s perspective, but to a buyer, it can signal risk. They may wonder whether the business is underinvesting, whether the margins are sustainable, or whether growth has been sacrificed in the process. Sometimes it makes more sense to reinvest part of that margin into growth. The multiple  is really about de-risking the business. Strengthening your management team. Diversifying your referral base the right way. Putting systems and processes in place. Reducing owner dependence. Making the company more transferable. Once you understand where you are across all three, you can start to see the gap between what your company is worth today and what you’d want to sell for. And you can start closing that gap. Start the conversation early When we look back at our best transactions, the smooth ones, the ones where sellers walked away feeling good about the outcome, there’s usually a pattern. We were talking with those owners three, five, sometimes ten years before they went to market. They’d come to us and ask, “what’s my company worth today?” We’d tell them. Then they’d say, “I wouldn’t sell for less than $10 million.” We then identify the gap and advise on how to close it. That thinking is what led us to formalize our Value Accelerator Program . In truth, we have been doing this kind of work for years. We just recently gave it more structure. The process is simple. We assess where the company stands today. We set a target, both a number and a timeline. Then we break the path forward into revenue, margin, and multiple. From there, we build an action plan and check in periodically, quarterly or annually depending on the situation, to measure progress and adjust course. And candidly, the owners who go through that process tend to be in a much better position when they are ready to exit. Where the market stands right now We’re not at the 2021 peak. That was a frenzy; the publicly traded companies were trading in the high 20s, money was cheap, and everybody was rushing to the exits. But we’re still in a better market than anything we saw from 2007 to 2020. Companies are generally trading for higher multiples today than they were before the pandemic. The publicly traded companies are still in the mid-teens, which sets the benchmark. The broader tailwinds are still there too. When I first got into this business, people were talking about the baby boomers who were about to turn 65. Now many of those same people are turning 80. That is when demand for home-based care really accelerates. So from a market standpoint, the fundamentals remain strong. What that means for owners is this: the market is solid, the long-term demand outlook is favorable, and the opportunity to build value ahead of a future transition is still very much there. But you have to be intentional about it. Want to know where your company stands? If you own a home care, home health, or hospice company and you’re curious about what the market would say about your business today, we’re happy to have that conversation.

A home care M&A case study with Becky Reel, founder of For Papa’s Sake Home Care At a Glance Sector: Home Care  |  Deal Type: Sell-Side M&A   The Situation: Becky Reel built For Papa’s Sake Home Care in honor of her grandfather and grew it by 300% over a decade, earning the #1 agency ranking in North America from Home Care Pulse. She had promised her parents she would build the agency to the point where its sale could fund their retirement. The Challenge: Selling wasn’t just a financial decision. Becky was balancing the demands of running the agency, raising two young children, and navigating the emotional weight of letting go of a business that carried her family’s name and legacy. She needed an advisor who understood both the business and the personal stakes. The Mertz Taggart Approach: Senior advisor Bruce Vanderlaan led a hands-on engagement. He educated Becky through every stage of the process, attended every meeting in person, and evaluated buyers not just on price but on their alignment with the agency’s mission and values. The Outcome: Becky found a buyer who shared her commitment to patient care and staff well-being. Her promise to her parents was fulfilled. The agency’s legacy continues under new ownership. When Becky Reel decided to sell the home care agency she’d built in honor of her grandfather, she needed more than a broker. She needed a partner who understood what was at stake, for her family, her employees, and the patients who depended on her team. Becky chose Mertz Taggart. Below, she shares the story of selling For Papa’s Sake Home Care, from the promise that started it all to the moment she found the right buyer to carry it forward. Honoring a Promise and a Legacy For Papa’s Sake Home Care was born from a promise and a mission close to my heart. Named in honor of my grandfather, who I called Papa, who endured a tragic experience in a nursing home, the agency represented our commitment to create a better option for seniors—one rooted in dignity, safety, and genuine care. My promise to my parents was equally important: to build and grow the agency to a point where its sale could fund their fulfilling retirement.  Over my 10 years, we grew by 300%, was ranked the number 1 agency in North America by Home Care Pulse (now Activated Insights), and received the Leader of Excellence award for seven consecutive years. Selling this agency was not just about a transaction; it was about finding someone who would continue this legacy of care.   Balancing Family, Legacy, and the Demands of the Sale  The journey to sell was a long and intensive process. As a mother to two young children and a wife, I still had my day-to-day responsibilities: running the agency, being present with my family, and somehow balancing all this with the intense demands of the sale process. The emotional weight of parting with something so personal was heavy, compounded by the need to maintain the agency’s standards and focus on my family’s needs. Bruce , my advisor from Mertz Taggart, recognized this balancing act and stepped in as more than a business guide; he became my greatest advocate and support system. Empathy and Strategic Expertise  Bruce and the Mertz Taggart team brought a unique blend of empathy and strategic acumen to every aspect of the process. Bruce understood that selling our agency was not just about numbers—it was about preserving a legacy. His focus was not only on maximizing the agency’s value but also on finding a buyer who respected the values that built it. He guided me with skill and precision, making complex decisions easier and ensuring I felt confident at each step. Ongoing Support During Critical Moments One of the most telling moments was when a potential buyer arranged a meeting that could determine the future of the agency. The stakes felt high, and I was nervous about facing such a pivotal moment alone. Without hesitation, Bruce booked a flight the very next day to be by my side, offering both his strategic insights and his steadfast support. His presence turned what could have been an overwhelming experience into one where I felt empowered and reassured. Client-Centered for Every Step of the Journey Throughout the process, Bruce and Mertz Taggart never made me question their commitment to me and my goals. In moments of doubt and exhaustion—when the balance of family, agency responsibilities, and the emotional toll of the sale felt like too much—Bruce reminded me of the impact we had made and the legacy it would leave behind. His encouragement and compassion kept me grounded and helped me see the journey through to the end. A Partner Who Truly Cares Selling For Papa’s Sake Home Care was one of the most significant and emotional decisions of my life. Bruce’s empathy, dedication, and strategic guidance made it possible to honor my promise to my parents while ensuring the agency’s legacy would continue. For anyone considering the sale of a home care agency they’ve poured heart and soul into, Mertz Taggart is more than an M&A firm—they are partners who truly care about their clients’ well-being and success. We are delighted to have received this incredibly in-depth testimonial from our client, Becky Reel . Becky’s story reflects what drives our work at Mertz Taggart: helping healthcare owners navigate the most consequential decision of their professional lives with the guidance, honesty, and advocacy they deserve. Every engagement is personal. Every outcome matters. Considering a Sale of Your Home Care Agency? Whether you’re years away or actively exploring your options, every conversation with Mertz Taggart is confidential. We’re here when you’re ready. Contact us: info@mertztaggart.com | 770.888.1171 Read more stories from our clients on our Testimonials page › Learn about our approach to home care M&A › Follow us on LinkedIn for daily insights ›

By Cory Mertz, Managing Partner — Mertz Taggart   |  Updated March 2026 Executive Summary:  Home-based care agency owners who may sell in the future can learn a lot from private equity firms. Three of the most useful lessons are to plan your exit early, track the right KPIs, and run a competitive sale process with professional guidance. These steps can help owners improve value, prepare more intentionally, and increase the likelihood of a stronger outcome when it is time to sell. If you own a home-based care agency and think you may sell your business someday, there is value in studying the people who do this for a living: private equity firms . Private equity firms (PE firms) acquire, grow, and exit businesses with one goal in mind: maximizing value. They are experienced at identifying what makes a company more attractive to buyers, improving performance over time, and preparing for a successful exit. That does not mean home-based care agency owners should operate like private equity investors. But it does mean there are a few practical habits worth borrowing. Here are three strategies agency owners can take from private equity firms when preparing for an eventual sale. 1. Plan your exit early One of the clearest lessons from private equity is this: they do not wait until the last minute to think about an exit. PE firms usually plan their exit strategy before they even close on purchasing a platform company, or as soon as possible after acquiring it. They think early about likely buyers, key value drivers, timing, and what the business will need to show in order to be attractive in the market. They also align business strategy and performance improvement efforts with that exit plan. As one private equity executive said at a recent conference, “We make our money when we sell, not when we buy.” In some cases, private equity firms will even overpay for an initial platform acquisition just to establish a foothold in the industry. What this means for agency owners: The best exits aren’t rushed, they’re the result of intentional preparation. Early exit planning can help you make better decisions long before you go to market. Your exit plan doesn’t need to be a 50-page document. Start with three things: your target sale price,  your ideal buyer type (strategic acquirer or PE firm),  and a realistic timeline. Then revisit it quarterly. Adjust as your business grows, as the market shifts, and as your personal goals evolve. Planning early gives you time to address the things that could otherwise reduce your value at closing, things like owner-dependence, client concentration, or financials that need organizing. It also gives you the freedom to sell on your own timeline, when you’re ready, on your terms. → Mertz Taggart’s Value Accelerator Program  helps agency owners build a roadmap to maximize value before going to market. 2. Be serious about KPIs PE firms are meticulous about metrics. They track KPIs not just to manage performance, but to build a compelling story for the next buyer. If you want to sell your agency at top-of-market value, understanding which numbers matter most gives you a real advantage. What this means for agency owners: Buyers are looking for agencies with predictable, recurring cash flow and low owner-dependence. The right KPIs can help you improve current performance while also making your business more attractive when the time comes to sell. Don’t just track these numbers; trend them over time . Clean financials and clear KPI dashboards signal operational maturity. They also give confidence in negotiations because we can show exactly what the business is worth and why. If you’re not sure which metrics matter most for your specific agency type, that’s worth a conversation with an advisor who specializes in healthcare M&A. The KPIs that drive valuation in home health may be different from hospice, or from behavioral health. 3. Run a banker-led competitive auction process when you sell We’ll be upfront: as M&A advisors, we have a perspective here. But we’ve also seen firsthand how much the process matters to the outcome. Private equity firms usually do not sell their businesses quietly to a single buyer without competition. Instead, they usually hire investment bankers to run a structured, competitive auction process. The reason is straightforward: when multiple qualified buyers are at the table, the seller gets better pricing, better terms, and more control over the process. A competitive auction process involves: preparing professional marketing materials,  identifying and qualifying the right buyers,  managing confidentiality,  soliciting multiple offers,  and negotiating not just price but the full deal structure including working capital targets, representations, and post-close transition terms. What this means for agency owners: Healthcare M&A has unique dynamics, and sector experience matters. An advisor who knows what buyers in this market look for, how they value agencies, and where issues tend to surface can position the business more credibly, anticipate concerns early, and run a process that is built to drive the strongest outcome. A well-run process with multiple qualified buyers also creates healthy momentum. Buyers who know others are interested tend to move more decisively, put forward stronger offers, and stay committed through due diligence. → See how Mertz Taggart has helped agency owners achieve successful exits on our Transactions  page. The Bottom Line: Your Agency Deserves a Thoughtful Exit Selling your home care agency is about more than a number. It’s about protecting the team you’ve built, the patients you serve, and the legacy you’ve created. It can also be one of the most financially rewarding decisions of your career, if you approach it with the same discipline that the professionals use. Plan early. Know your numbers. Surround yourself with the right people. These are the same principles PE firms rely on, and they’re at the heart of every successful exit we’ve had the privilege of being part of. Considering an exit? Mertz Taggart offers confidential, no-obligation consultations for home care, home health, hospice, and behavioral health agency owners. Start a conversation →

Insights from Mertz Taggart’s Capital + Strategy panel on closing deals in home health, home care, and hospice M&A By Bruce Vanderlaan, Managing Director, Mertz Taggart Executive Summary Selling a home-based care agency involves more than finding a buyer and agreeing on price.  In this panel discussion, experts shared practical lessons from real transactions, including why preparation, trust, clean financials, and experienced advisors can make the difference between a smooth closing and a difficult one. For agency owners thinking about an eventual exit, the message was clear: the deals that go well usually involve sellers who prepare early, stay engaged, and address common issues before they become deal problems. The panel identified seven common challenges agency owners face when selling:  the time commitment of the M&A process, the emotional weight of letting go, the critical role of trust between buyers and sellers, the impact of clean financials on valuation, working capital disputes, labor and compliance risks, and the importance of choosing advisors who specialize in healthcare transactions Selling a home-based care agency is not just a financial event. It is also an operational and emotional process that can surface issues many owners do not fully anticipate. That was one of the clearest takeaways from Mertz Taggart’s April 10, 2025 Capital + Strategy panel, “Closing the Deal: Overcoming Common Challenges in Home-Based Care M&A.”  The discussion featured Bruce Vanderlaan of Mertz Taggart, Cameron Cordts of PurposeCare, and Mike Trigilio of HouseWorks, who brought deep, firsthand experience from transactions across the home-based care spectrum. For agency owners wondering how to sell a home-based care agency, or how to prepare for a smoother exit, the conversation offered a practical reminder: the sellers who tend to have the best outcomes are the ones who prepare early, stay engaged, and work with experienced advisors throughout the process. Selling your Home-Based Care Agency is a Full-Time Job The M&A process demands far more time and attention than most agency owners expect. Running your business while managing a sale requires serious bandwidth. Bruce Vanderlaan opened the discussion by stressing the intensity of the process: selling an agency is not something you do on nights and weekends. It is another full-time job on top of running your business. Cameron Cordts added that PurposeCare structures due diligence around weekly milestones, giving sellers a clear sense of what to expect and when, which helps keep the process moving without becoming overwhelming. What Role Does Emotion Play in Home Care M&A Transactions? Sellers consistently underestimate the emotional weight of the decision. Whether you’re just starting to ask “How do I sell my home health agency?” or you’re deep in discussions, the personal side matters. The decision to sell is rarely a single moment. It’s a slow accumulation. For some owners, it’s triggered by mounting strain—regulatory fatigue, reimbursement uncertainty, staffing challenges, burnout. For others, it’s a deliberate choice: they’ve hit a financial target, the business is structured to transact, and they’re ready. But either way, the emotional weight is real. “It’s not uncommon to see tears at the closing table. These businesses are personal legacies.”  — Bruce Vanderlaan, Mertz Taggart Mike Trigilio, who has led and sold multiple businesses, agreed. Even institutional sellers get emotionally invested. Letting go is never as easy as it looks on a spreadsheet. Why Is Trust a Must for Healthcare M&A Success? One of the biggest hidden challenges is a seller’s hesitation to share information, often driven by a lack of trust. Building credibility early in the process makes a measurable difference. Many agency owners enter the process with very little familiarity of advisory firms, valuation concepts, or how M&A works. They typically didn’t start their business to sell it. They know home health. They know hospice. They don’t know the advisory landscape. That means trust has to be built, through education, through showing up, through discretion. Bruce Vanderlaan emphasized that a major part of Mertz Taggart’s role is connecting sellers with vetted, reputable buyers. That credibility can make a meaningful difference in how a process unfolds. To reinforce transparency, Cameron shared that PurposeCare introduces sellers to its local leadership team early. That helps provide peace of mind about the future of the business after closing. Financial Records Affect the Valuation of your Home Care Business Accurate, well-documented financials directly influence how buyers approach valuation and their confidence in the deal. Messy books are one of the most common deal risks. Your financials tell a story. If that story is messy (personal expenses mixed in, inconsistent records) buyers notice. And it costs you. Bruce recounted deals where large personal expenses were mixed into business records. If buyers cannot separate the owner’s lifestyle from the agency’s actual performance, it impacts perceived value. The takeaway was clear: well-documented financials are not just helpful. They are foundational to a credible offer. What Is the Working Capital Dispute in Home Health Agency Sales? Working capital is a common sticking point in nearly every home-based care transaction. Both sides have legitimate concerns, and resolving them requires clear communication. “Sellers feel like they’re giving up their hard-earned receivables. Buyers just want to avoid funding payroll on Day One.”  — Cameron Cordts, PurposeCare Bruce likened it to selling a car: the seller wants to hand it off with an empty tank, while the buyer wants it full. The advisor’s job is to agree on how full it needs to be. Labor and Compliance Issues Can be Deal-Killers Wage and hour violations, improper worker classification, or missing documentation can create last-minute complications that threaten a transaction. Mike explained that he has never been through a deal where something did not come up. The key is to find it early and manage the risk. The panelists were aligned on this point: these issues are common, but they become much more manageable when addressed before they threaten the transaction. Why Does Your Advisory Team Matter When Selling a Home Health Agency? The quality of your advisory team (attorney, accountant, and M&A advisor) has a direct impact on whether a deal closes smoothly or stalls. Bruce warned that if your attorney does not specialize in transactions, or your accountant is not responsive, the entire deal can suffer. Cameron and Mike agreed that smoother deals tend to happen when sellers are supported by advisors who understand healthcare and know how to manage the M&A process. As Bruce summed it up: “The deals that succeed are the ones where the seller is prepared, the advisory team is aligned, and there’s mutual trust between both sides. That’s when everything starts to click.” Key Takeaways for Agency Owners Considering a Sale ✓ Selling a home health or home care agency is a full-time commitment on top of running your business. Start preparing early. ✓ The emotional weight of selling a personal legacy is real. Acknowledge it and plan for it. ✓ Trust between buyers and sellers is the foundation of a smooth transaction. Work with advisors who build that credibility. ✓ Clean, well-documented financials directly affect the valuation of your home care business. ✓ Working capital disputes are common but manageable with the right guidance. ✓ Labor and compliance issues should be identified and addressed early—before they become deal-killers. ✓ Your advisory team matters. Choose professionals who specialize in healthcare M&A. Ready to Explore Your Options? If you’re asking yourself “How do I sell my home health agency?” or want to better understand the valuation of your home care business, the best next step is a confidential conversation with an experienced M&A advisor. At Mertz Taggart, we specialize in helping home-based care providers navigate the complexities of selling, from valuation to deal structure. We guide you every step of the way. Schedule a confidential consultation today. Contact Us   |  770-888-1171 |  www.mertztaggart.com

By Cory Mertz, Managing Partner — Mertz Taggart   |  Updated March 2026 Executive Summary:  Insights from a recent webinar with Maxwell Healthcare Associates and Mertz Taggart. A buyer is not just valuing what a home health or hospice agency has earned. A buyer is valuing how durable those earnings look, how transferable the business feels, and how much risk comes with the transition. At a glance: Revenue matters , but buyers also evaluate the quality of earnings and the reliability of the reporting behind them Accrual-basis financials  help buyers assess performance more accurately Operations matter , especially intake, scheduling, productivity, revenue cycle, and payer workflows Technology matters  when it improves reporting, efficiency, and transition readiness Cultural fit matters  because disruption after closing can affect retention, service delivery, and performance In a recent webinar hosted with Maxwell Healthcare Associates, Mertz Taggart managing partner, Cory Mertz, and Maxwell’s COO, Jay Duty, walked through the key factors that drive how home health and hospice agencies are valued in an M&A transaction. What Financial Metrics Do Buyers Look at When Valuing a Home Health or Hospice Agency? When we assess a company on behalf of a seller, we focus on three high-level financial metrics: revenue, gross margin, and adjusted EBITDA margin. Revenue is where it starts. Generally, larger agencies with higher revenue tend to command stronger multiples, all else being equal. Gross margin tells you how much is left after your cost of providing care, things like: clinician compensation, burden costs, travel, and supplies.  Healthy ranges often look like this: Home health:  45% to 55% Hospice:  50% to 55% Home health can be more variable depending on revenue mix, including episodic revenue, Medicare Advantage, Medicaid, VA reimbursement, and geography. Adjusted EBITDA margin is what’s left after subtracting overhead from your gross profit, with certain adjustments factored in.  Ranges often viewed as attractive include: Home health:  15% to 25% Hospice:  18% to 25% But adjusted EBITDA is rarely simple. Different buyers may evaluate the same agency differently depending on: owner involvement replacement cost retention cost growth trajectory time period under review what the buyer believes is sustainable after closing That is why a multiple means very little without a credible view of adjusted EBITDA. One important detail: buyers evaluate these numbers on an accrual basis, not cash basis. That means revenue is recognized when it’s earned, and payroll is matched to the month the work was performed. The goal is to line everything up so that margins are consistent from month to month. If your books are on a cash basis, having them converted to accrual before going to market gives buyers, and you, a much clearer picture. Why Is Adjusted EBITDA So Important, and So Variable? Adjusted EBITDA is the number that multiples are applied to, which is why it matters so much. But it’s also one of the most variable parts of a valuation. Two buyers can look at the same company and arrive at different adjusted EBITDA figures, and both can be reasonable. The adjustments depend on factors like: the time period being evaluated (pro-rata, trailing twelve months, or another period),  whether the company is growing,  and how the buyer models replacement or retention costs for the owner after closing. This is worth keeping in mind if someone approaches you with a high multiple. A multiple doesn’t mean much without understanding what it’s being applied to. An advisor or broker who leads with a lofty multiple before doing a thorough analysis of your financials may not be giving you the full picture.  The more valuable conversation is one that starts with what your adjusted EBITDA actually looks like, on an accrual basis, with honest adjustments, so you can make a sound decision about whether and when to go to market. How Do Operational Efficiencies Affect an Agency’s Value? Beyond the financials, buyers look closely at how well an agency runs day to day.  The areas that come up most often include: clinical quality, intake and scheduling,  revenue cycle management,  and workforce productivity.  How efficiently you convert referrals into admissions, process eligibility and authorizations, and collect on claims all contribute to the picture a buyer forms of your agency. If those back-office processes are running smoothly, it signals lower risk. If they’re not, buyers may see it as margin they can improve, which can work in their favor during negotiations, not yours. Workforce management is especially important because labor is the largest cost in this business. Buyers want to understand how you staff your branches, how productive your clinicians are, and what systems you use to manage scheduling and capacity. The more visibility you have into your own workforce data, the stronger your position. Clinical quality matters too.   Strong documentation, solid patient outcomes, and a clean regulatory track record reduce risk for a buyer. And in a market that’s moving more toward managed care and Medicare Advantage, the ability to manage authorizations and payer-specific requirements efficiently has become a significant factor. How Does Technology, Especially EMR Compatibility, Factor Into Valuation? Technology has moved from a “nice to have” to a real factor in how agencies are evaluated.   The EMR system is the starting point. From a buyer’s perspective, if the seller is on the same EMR, that’s a bonus as it reduces transition risk, and some buyers may be willing to pay a bit more for that smoother integration path. Even when the EMR platforms match, the way each organization uses the system can vary significantly. How you define terms, how you structure reporting, and whether you close out months consistently all affect how useful the data is to a buyer during due diligence. Beyond the EMR, buyers are paying attention to the broader technology stack. Speech recognition tools that cut documentation time for nurses, referral management platforms, predictive analytics, workforce scheduling tools, patient satisfaction surveying — these are all areas where technology investments can show a buyer that your agency is operating efficiently and making data-driven decisions. The key question a buyer asks about technology isn’t just “what do they have?” It’s “how are they using it?”   An agency that has strong tools and is leveraging them to improve productivity, manage care quality, and make strategic decisions is a more attractive acquisition than one with the same tools collecting dust. What Kinds of Risk Are Buyers Most Focused On? For strategic buyers (companies already in the space looking to grow), the primary concern is transition risk.   What happens to the business if the owner steps away? Buyers want to understand: what systems are in place,  what the leadership bench looks like,  and whether key referral relationships are tied to the owner personally or distributed across the team. If a buyer feels that the cash flow could deteriorate once the owner disengages, that’s a risk they’ll price into their offer. Building a management or executive team that can operate independently, and referral relationships that aren’t concentrated in one person, are two of the most valuable things a seller can do before going to market. For financial buyers (private equity groups or family offices looking for a platform to enter the space) risk is still important, but they’re also evaluating opportunity. They’re looking at: whether the platform can scale, whether the leadership team can support growth,  and whether there’s overhead capacity to expand.  In those situations, a financial buyer may be willing to pay a premium to get into the industry, especially if they see a path to meaningful returns over a four- to five-year horizon. Why Does Cultural Alignment Matter in a Home Health or Hospice Transaction? This is one of the areas that surprises people. Culture isn’t just a soft consideration, it can directly influence which offer a seller accepts and how the transition goes. When we run a competitive process and present a seller with multiple strong offers, it’s not unusual for the seller to choose an offer that isn’t the highest in terms of dollars.  They choose the buyer they feel most confident will get the deal to closing without trying to renegotiate, who will treat their employees well, and who will take care of the legacy they’ve built. For many owners, this is their life’s work. The buyer who respects that often wins. From the employee perspective, a change in ownership can be unsettling. People worry about what it means for them, whether their roles will change, whether the culture they’ve been part of will survive.  A thoughtful buyer plans for that.  They work collaboratively with the seller on an employee communication strategy, helping ensure the right people are brought in at the right time and in the right way, without compromising confidentiality. There’s also a practical reason culture matters:  every transaction involves a holdback for potential indemnification claims. If the relationship between buyer and seller is strong, the post-closing period tends to go smoothly. If it’s not, even minor disagreements can escalate. We’ve seen situations where buyers who felt things weren’t going well tried to place blame on the seller, even when the seller had done nothing wrong. It took time, energy, and legal costs to resolve.  Choosing a buyer whose values align with yours isn’t just about feeling good. It’s about protecting yourself after the deal is done. When Should You Start Preparing for a Sale? Earlier than most owners expect. Some of our clients have engaged us years before they planned to go to market. In one case, a client first reached out with a six-year timeline. We started by understanding their objectives and running what we call a gap analysis:  here’s where your valuation is today,  here’s where you want it to be,  and here’s what needs to happen to close that gap. Over time, month over month, quarter over quarter, we check in, update the analysis, and make recommendations. When both the value and the timing align, that’s when you go to market .  Even if a sale is years away, getting a clear, honest picture of what your agency looks like through a buyer’s eyes is one of the best investments you can make. It gives you a roadmap for the improvements that will matter most when the time comes. If you’re thinking about  a future sale of your home health, home care, or hospice agency, we’re happy to have a confidential conversation about how your agency would be received in the M&A marketplace. Reach out to us at info@mertztaggart.com or visit our Value Accelerator Program to learn how we help owners prepare. About the Author Cory Mertz , M&AMI, is a managing partner at Mertz Taggart, where he advises home health, home care, and hospice owners on selling their businesses. With nearly two decades in healthcare M&A and more than 160 completed transactions across the firm, Cory brings firsthand experience to every conversation.

By Cory Mertz, Managing Partner — Mertz Taggart   |  Updated March 2026 Executive Summary: Owners of home health, hospice, and home care agencies are often approached by buyers before they are actively planning a sale. While those inquiries can be useful, they should be handled carefully.  A buyer-led conversation rarely produces the best possible outcome for the seller. Agency owners should prepare before responding, understand how professional buyers approach acquisitions, and consider working with an experienced healthcare M&A advisory firm if they are seriously considering a sale now or in the future. If you own a home health, home care, or hospice agency, you already know the feeling. The emails. The LinkedIn messages. The phone calls from people you’ve never met, saying they want to buy your company. It’s flattering. It’s a little overwhelming. And if you’re at a point in your career where you’ve thought about what’s next, it can be tempting to engage. But here’s what most agency owners don’t realize: an unsolicited offer isn’t really an offer.  It’s an opening move.  The buyer doesn’t know your financials, your payer mix, your retention numbers, or what makes your agency special. If they’re quoting a “multiple of X” or telling you they paid “Y for a company just like yours,” they’re working with assumptions, not information. When a buyer contacts you about purchasing your home care agency, don’t ignore the inquiry, but don’t rush into it either. Take time to research the buyer, understand your agency’s true value, and consider engaging a healthcare M&A advisor who can help you evaluate whether it’s the right time and the right opportunity. That doesn’t mean you should ignore these inquiries. They can actually be useful. But how you respond matters a great deal. Here’s how to approach it thoughtfully. How Should You Respond to an Unsolicited Offer for Your Agency? The most important thing is not to rush.   You don’t need to respond the same day, and you certainly don’t need to share any confidential information in an initial conversation. Before you reply, take a few steps to understand who you’re dealing with.   Look at their LinkedIn profile and company website. If it’s a buyer (not a broker), check whether they’ve completed previous acquisitions in home care, hospice, or home health. If the identity of the buyer is vague or hard to verify, that’s a reason to proceed carefully. If someone claims to be a broker representing a buyer, a credible one will share the buyer’s name early in the conversation and be clear about who’s paying their fee. Be cautious of brokers who initially claim to have a buyer, then pivot to pitching themselves as your sell-side representative. When you do respond, keep it simple.   Ask how they plan to finance the acquisition and what drew them to your agency specifically. A serious buyer will have clear answers. Then let them know you’ll want to consult with an advisor before moving forward. Any credible buyer or investor will respect that, and in fact, most of them appreciate having a professional intermediary in the process because it sets clear expectations on both sides. Should You Sell Your Home Care Agency to the First Buyer Who Reaches Out? We understand the appeal. When someone puts a number on the table, especially if it sounds reasonable, it’s natural to want to explore it.  But in our experience, negotiating with a single buyer almost always results in a lower price and less favorable terms than a structured process with multiple qualified parties. Think about it from the buyer’s perspective. If they know they’re the only one at the table, there’s no urgency to put forward their strongest offer. They can take their time, ask for more concessions, and renegotiate after due diligence. When there are multiple interested parties, the dynamic changes. Buyers who know others are interested tend to move more decisively and submit more competitive terms. This is exactly how private equity firms handle every one of their exits. They hire an investment bank or M&A advisory firm to run a competitive process with a curated group of qualified buyers and investors. They believe, and we’ve seen it confirmed over and over, that this is the most reliable path to the best possible outcome for the seller. → Related: How to Sell Your Home Care Agency: 3 Exit Strategies from Private Equity What Makes a Buyer “Qualified” to Acquire a Home Care Agency? Not every buyer who reaches out is the ideal buyer for your agency.  Whether you’re working with an advisor or evaluating interest on your own, it helps to understand what separates serious acquirers from casual shoppers. A qualified buyer generally meets three criteria: They have the financial resources to complete the transaction, including access to sufficient cash or a committed fund. A professional buyer won’t hesitate to share this information with you or your advisor.  They understand the home-based care industry. Strategic buyers will naturally have this knowledge, but if you’re speaking with a financial buyer or PE firm, you want to make sure they’re well-educated on the sector before you invest time in the process.  They have meaningful transaction experience. Most serious strategic acquirers have dedicated M&A teams. Smaller or newer buyers may struggle to execute efficiently, which can extend timelines and introduce risk. Building an “A-list” of buyers who meet all three of these criteria is one of the most valuable things an M&A advisor does. It’s also one of the hardest to do on your own, because it requires knowing who’s actively acquiring, what they’re looking for, and how to approach them confidentially. Why Does Confidentiality Matter When Selling a Home Care Agency? This is something that weighs heavily on owners, and rightly so. If word gets out that you’re exploring a sale, it can unsettle your employees, your referral sources, and even your patients. In some cases, it can disrupt the sale itself. An experienced healthcare M&A firm protects confidentiality by controlling what is shared, with whom, and when. The right information is shared with the right buyer at the right time, so you can create interest without exposing details too early or disrupting the business. This is one of the key reasons we encourage owners not  to engage deeply with unsolicited buyers on their own. One conversation with the wrong person, at the wrong time, can create problems that are difficult to walk back. What Does a Healthcare M&A Advisor Actually Do? One of the main benefits of working with a healthcare M&A advisory firm is that it lets you stay focused on what you do best, running your agency, while your representatives handle the details of the transaction. A good advisor takes the time-intensive work off your plate:  preparing and updating the financial data book and Confidential Information Memorandum,  curating the buyer list,  running the competitive bid process,  coordinating with attorneys and accountants,  and addressing potential roadblocks before they become deal-breakers.  They also bring perspective on what’s considered “market” for both value and terms, so you can negotiate from a position of knowledge rather than guesswork. For home health, home care, and hospice owners, working with an advisor who specializes in healthcare M&A is especially important. A healthcare-focused advisor understands how buyers in this space evaluate agencies, what they are willing to pay for, and how to position the business credibly in the market. They can also spot issues early, help resolve them before going to market, and bring added credibility with buyers because they understand the industry and can speak their language. → See how Mertz Taggart has guided agency owners through successful transactions on our Transactions  page. It’s Never Too Early to Understand Your Options Receiving an inquiry about your agency can be the start of an important conversation, even if you’re not ready to sell today.  The best way to respond from a position of strength is to understand what your agency is worth, what the current market looks like, and what a well-run process can deliver. For most home care owners, 80–95% of their net worth is tied up in their business. That’s reason enough to treat the sale like the significant financial event it is, with the right preparation, the right team, and the right process behind you. Curious about what your agency is worth? Mertz Taggart provides confidential, complimentary valuations for home health, home care, and hospice agency owners. Whether you’re considering a sale now or just want to understand your options, we’re happy to have the conversation. Request a confidential valuation → About the Author Cory Mertz , M&AMI, is a managing partner at Mertz Taggart, where he advises home health, home care, and hospice owners on selling their businesses. With nearly two decades in healthcare M&A and more than 160 completed transactions across the firm, Cory brings firsthand experience to every conversation.