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By Cory Mertz, M&AMI, 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, JD, 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, M&AMI, 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.

By Cory Mertz, M&AMI, 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. 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.

As part of our Behind the Curtain webinar series, we’re committed to giving agency owners a transparent, unfiltered view of what drives M&A activity in home-based care. In our most recent session, we welcomed Rich Keller, CEO of PurposeCare, to share his perspective on what strategic buyers value most—and how operators can position themselves for success in today’s market. Hosted by Michael Lloyd and Cory Mertz of Mertz Taggart, the conversation covered everything from payer dynamics and deal structure to what makes PurposeCare walk away from a deal. The PurposeCare Playbook Founded with a mission to deliver integrated, patient-centered care, PurposeCare is a rapidly growing provider operating across multiple states with a focus on the dual-eligible population. The company, backed by Lorient Capital, provides a combination of home care, home health, and primary care services to underserved populations. Keller emphasized PurposeCare’s focus on markets where they can build density and serve complex patients effectively. “We’re not just looking for one-off assets—we’re looking to create a care ecosystem,” he said. What Makes a Deal Attractive? When evaluating acquisitions, Keller outlined several important criteria: Trust is Key Keller emphasized the importance of shared values: “Culture matters… The most successful deals we’ve had have been when we established trust with the owners out of the gate.” Clean Operations and Scalable Infrastructure PurposeCare seeks companies with robust, compliant systems and scalable infrastructure already in place. Keller made clear: “Our ability to be successful in acquiring companies isn't just to acquire companies... the key to us is we're going to want to integrate that company into our business.” Strategic Market Selection and Payer Partnerships PurposeCare’s evaluation of payer mix goes beyond just reimbursement types—it’s deeply tied to the regulatory and market landscape in each state. Indiana, for example, stood out as a strong fit. He explained that while the state’s shift to managed care could be seen as a disruptor for some, PurposeCare views it as a strategic opportunity: “We think that that's actually not a bad thing for us, because it's a chance to partner with payers in a way that's a little bit more creative than you can do in just straight Medicaid.” By targeting markets where they can form deeper, more flexible payer relationships, PurposeCare positions itself to serve complex populations more effectively—especially dual-eligibles. This market-by-market approach is key to sustaining growth and integration across their care model. Walking Away from a Deal Keller was candid about the types of issues that can give buyers pause—or stop a transaction altogether: State-by-State Medicaid Complexity: “If you're in Medicaid, you've seen one state… So they're all different.” PurposeCare evaluates markets carefully and will walk away from those with regulatory uncertainty or payer dynamics that don’t align with their model. Leadership Uncertainty: “We like to work with founders. The owner helps us through a transition and allows us to learn from them and their leadership team.” Lack of a strong leadership team—or unclear expectations from the seller—can derail buyer confidence. Preparation Gaps: “Think about it through the eyes of the entity that wants to purchase you... What are they going to value? What are the skeletons in the closet? Get them out.” If an owner hasn’t addressed internal issues—operational, financial, or compliance-related—it’s likely to show up in due diligence. Sector-Specific Priorities PurposeCare evaluates acquisitions based on the specific home-based care sectors involved: Home Health Clinical quality and CMS ratings are top concerns. Consistent documentation and scalability are essential. Home Care Labor compliance and caregiver retention are critical. Integration potential with clinical services is highly valuable. Primary Care Integration Clinical governance and data-sharing capabilities are key considerations, especially for managing high-risk populations. Deal Structure Preferences Rather than generalizing about deal mechanics, Rich Keller emphasized the importance of minimizing disruption while integrating acquired agencies into the PurposeCare platform: “We try to do it in a manner that creates as little disruption as possible. But we're going to put a PurposeCare fingerprint on it.” He also underscored the importance of seller involvement during the transition, particularly when acquiring founder-led businesses: “We like to work with founders. The owner helps us through a transition and allows us to learn from them and their leadership team.” Advice for Sellers Keller’s advice to agency owners considering a transaction was both simple and strategic: “Know your numbers, know your team, and know what you want out of the deal.” He encouraged sellers to spend time preparing—cleaning up their books, investing in staff retention, and working with advisors who understand their business model and goals. “The more prepared you are, the smoother and more valuable the process will be,” he said. Looking Ahead: Growth Through Integration PurposeCare’s future growth strategy remains focused on high-need markets, emphasizing integrated care delivery. Keller articulated this forward-looking approach clearly: “How do we leverage our position in the home on the home care side and the personal care services space to get in front of changes in condition on a pre-acute basis and treat them on an acute basis, and really keep people out of the hospital?” Final Thoughts Rich Keller’s session offered a clear and compelling look into how strategic buyers approach acquisitions in the home-based care space. His emphasis on values, operational readiness, and long-term integration aligns with the themes we continue to see in the market. Whether you’re actively preparing for a transaction or just beginning to think about your future, Keller’s insights are a valuable resource for understanding how to stand out to the right buyer. 👉 To watch the recording of the full webinar, visit: https://www.mertztaggart.com/behind-the-curtain Are you contemplating a sale of all or a portion of your healthcare services company? Arrange a confidential discussion with our M&A experts via info@mertztaggart.com

By Kevin Taggart, CM&AP, 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. We’ve been advising healthcare services owners on sell-side transactions for over a combined 36+ years and have closed more than 165 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 company or a $50 million one. Two deals illustrate why. Deal 1: Same Buyer, Direct Offer to Final Close — $7.5M to $15M A behavioral health company was approached directly by a well-capitalized strategic buyer. The buyer knew the market, liked the company, and moved quickly. Their offer: $7.5 million. It wasn’t a bad offer. The seller liked the buyer and was tempted to move forward. Instead, they engaged us for a free valuation before signing anything. Our view: we believed we could do meaningfully better than $7.5 million in a competitive process. The seller agreed to test the market — and, importantly, asked us to keep that initial buyer in the process. They liked them and wanted them to have a fair shot at the deal. We ran a process. The same buyer came back to the table almost immediately, this time at $11.5 million — $4.0 million more than their original direct offer, a 53% increase — from the same buyer, on the same business, with the same diligence information. Nothing about the company had changed. What changed was that the buyer knew they were no longer the only one at the table. Then competition took over. In total, we received 15 offers from credible, well-capitalized buyers. The deal ultimately closed at $15 million — a $7.5 million increase, or 100% above the original direct offer, and $3.5 million more than the same preferred buyer’s revised number. The seller got the buyer they wanted to work with, at a price the market — not the buyer — set. Same buyer. Same company. Twice the price. That additional $7.5 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 Business — From $37 Million to $52 Million An outpatient behavioral health business came to us with a strong, rapidly growing operation. A buyer had already approached the seller directly with an offer of $37 million — a serious number from a serious acquirer. We took the company to market. This was a competitive process, though more concentrated than most: we received 6 offers in total, all from legitimate, well-capitalized strategic and PE-backed buyers. Six was enough. As the process developed, one buyer came in at a number very close to where the original buyer was sitting. That competing offer did exactly what a competitive process is supposed to do — it reframed the floor. We were able to use that leverage to move the buyer the seller wanted to work with up, well past their original $37 million number. They came back at $52 million, $15 million higher than where they started. The deal closed at $52 million with the seller’s preferred buyer. If that seller had responded directly to the initial $37 million offer — a perfectly reasonable-sounding number from a real buyer — they would have left $15 million on the table. The buyer they ultimately sold to was the same buyer they would have sold to in the direct deal. The only difference was the presence of competition, and a credible alternative bid sitting next to the preferred buyer’s offer. 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 preferred buyer in Deal 1 didn’t go from $7.5 million to $11.5 million because they suddenly saw new value — they moved because they had to in order to stay in the deal. The preferred buyer in Deal 2 went from $37 million to $52 million for the same reason. Neither would have gotten there on their own. That spread — $7.5 million versus $15 million on the smaller deal, $37 million versus $52 million on the larger one, in each case 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 these deals illustrate: never tell a buyer what you think your company is worth. If the Deal 1 sellers had volunteered that they thought $7.5 million was fair, they would have created a ceiling — and that ceiling would have cost them $7.5 million. If the Option 2 sellers had anchored to $37 million, they would have left $15 million behind. It’s Not Just Price Going direct doesn’t only cost you in headline value. In a competitive process, buyers sharpen their terms too — faster timelines, cleaner deal structure, less holdback, lower earnouts, shorter performance windows. When there’s no competition, there’s no urgency to be accommodating. In both Deal 1 and Deal 2, the seller ended up working with a buyer they liked — in Deal 1, the same buyer who originally approached them. The competitive process didn’t cost them their preferred partner. It just made sure that partner paid market price. 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 both deals above, the sellers’ eventual buyers paid significantly more because they knew others were at the table — not because they were the only option. In Deal 1, the seller’s preferred buyer paid twice their original direct offer. In Deal 2, the seller’s preferred buyer paid $15 million more. 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.

By Michael W. Lloyd | Originally published January 20, 2023 | Updated May 7, 2026 At a Glance You do not need to be actively considering a sale to benefit from a relationship with an M&A advisory firm. For home care, home health, and hospice agency owners, an experienced advisor can provide valuation guidance, exit planning support, marketplace intelligence, and industry knowledge well before you are ready to go to market. Understanding these areas early can help you make better operational decisions today and position your agency for a stronger outcome whenever you do decide to sell. For many agency owners, selling their home care or hospice agency will be the most important financial decision of their life. It’s not only a difficult decision because of its emotional ties, but also tough to know when to sell or to let go. Confidentiality is paramount. And the complexity and uncertainty surrounding the idea of selling often lead agency owners to ignore or postpone it entirely. The good news is that an M&A advisor can add value well before you are ready to sell your agency, or even if you are not considering a sale at all. Here are some of the benefits an agency owner can get from engaging with a specialized M&A advisory firm early. Valuation Guidance and Exit Planning One of the most practical things an M&A advisory firm can do is help you understand what your agency is worth today and what you can do to increase that value over time. There are three widely accepted valuation methodologies that professional firms typically employ: discounted cash flows (DCF), comparable company analysis, and precedent transactions. To truly understand the value of a home care, home health, or hospice agency, that analysis requires specialized knowledge of these sectors. When seeking valuation guidance, choose an advisory firm with experience in these verticals. An even better selection is a firm that has both valued agencies and participated in actual transactions in the marketplace. Some of the questions a specialized M&A firm can help you answer: Which valuation methodology is most appropriate for my agency? How much is my agency worth today? What operational changes should I make now that will ultimately increase value? What are the high-risk elements that caution buyers the most? Education on the M&A Process Many agency owners have never been through a transaction before. Learning what a well-run, professionally managed M&A process looks like, and what it requires of every stakeholder, can remove a great deal of uncertainty. Common questions an advisor can walk you through include: How long will the process take from beginning to end? How much additional work will be required from the owner and potentially from key employees brought into the circle of trust? How can confidentiality be managed so that key stakeholders do not find out before you are ready? What type of information does an M&A firm need to build the materials for an effective, competitive process? → Related: 7 Common Challenges Home-Based Care Owners Face When Selling Their Agency M&A Marketplace Updates M&A advisors live and breathe transactions. Their wealth of information can be invaluable to an agency owner seeking to understand market dynamics. A firm that specializes in care-at-home can provide insight on questions like: What makes an agency an attractive acquisition target? Who are the most acquisitive buyers in today’s market? Which geographies are attractive to which buyers? What are the current market terms for negotiated areas of a purchase agreement?\ This kind of intelligence is hard to come by on your own. Even if a sale is years away, understanding the buyer landscape and deal terms can shape how you run and grow your agency in the meantime. Industry Knowledge An M&A advisory firm that specializes in home care, home health, and hospice has a deep body of knowledge on the industry and can provide insights on operating margins (including gross profit and adjusted EBITDA margins), innovative ideas being adopted across the sector, standard solutions to operational problems you may be facing, and introductions to other industry advisors who could assist you. The above is a brief summary of some of the benefits an agency owner can get from engaging with a specialized and professional M&A advisory firm, regardless of their exit timeline. The earlier you start the conversation, the more prepared you will be when the time comes. → Related: Considerations When Choosing a Home-Based Care M&A Advisor Key Takeaways • You do not need to be ready to sell to benefit from engaging an M&A advisory firm. • Valuation guidance can help you understand what your agency is worth and what drives that value. • Learning the M&A process early removes uncertainty and helps you plan. • Marketplace intelligence gives you insight into buyer activity, deal terms, and regional demand. • Choose an advisory firm with specialized experience in home care, home health, and hospice. Start the Conversation Early Mertz Taggart has been advising healthcare services owners for over twenty years. Whether you are actively considering a sale or simply want to understand your options, we welcome a confidential conversation. Contact us to get started.

By Michael W. Lloyd | Originally published March 7, 2023 | Updated May 7, 2026 At a Glance Selling a care-at-home agency is one of the most consequential decisions an owner can make. After 160+ completed healthcare M&A transactions, Mertz Taggart recommends every home care, home health, or hospice owner address five areas before going to market: clarifying exit goals, reducing owner dependency, defining the ideal buyer profile, engaging an experienced M&A advisory firm, and organizing diligence-ready information. Getting these right can significantly affect both the value you receive and the outcome for your employees and patients. For many agency owners, exiting their business can feel like stepping away from something deeply personal. It’s an emotional decision, but also one that rewards careful planning and sophistication to obtain the best outcome. The list of things to consider before a sale is long. But after guiding owners through many successful healthcare services M&A transactions across home care, home health, and hospice, we have narrowed it down to the five that matter most. These are the areas where preparation consistently separates the owners who get the outcome they want from those who leave value on the table. 1. Outline the Goals and Objectives of Your Exit Strategy Before anything else, get clear on what matters most to you and rank those priorities. The financial outcome is important, but it is rarely the only thing owners care about. Consider: How much will I receive after taxes? Will the legacy of the business be maintained? Will my employees still have jobs, and will company culture remain? Do I want to stay with the business for a period beyond a standard transition? Documenting these priorities early gives you a framework for evaluating every offer and every buyer that comes to the table. 2. Distance Yourself from the Agency’s Day-to-Day Operations Care-at-home investors are highly sensitive to transition risk. In the words of Cory Mertz, Managing Partner: they worry about "risk that the business will deteriorate after a closing," and after the owner has received a substantial payout. Delegating responsibilities is challenging. But separating yourself from the agency’s day-to-day operations adds flexibility to your options upon exit and can meaningfully increase the value a buyer is willing to pay. A business that runs well without its founder carries less risk for a new owner. 3. Define Your Ideal Buyer or Investor Profile Choosing the right buyer or investor to partner with, rather than simply selecting the highest offer, can make or break the outcome. A buyer who has direct experience with home care, home health, or hospice transactions, plenty of cash on hand, and a healthy credit line will have a higher certainty of closing the deal. The right buyer will also strive to maintain or improve the service quality while caring for your employees. Fit matters as much as price. 4. Engage a Professional, Industry-Experienced M&A Advisory Firm An M&A advisory firm that specializes in home care, home health, and hospice will guide and prepare you for a sale that can maximize value while fulfilling your goals and objectives. Finding the right buyer and compelling them to make their highest offer requires a well-run, competitive M&A process. Preparing the marketing materials, financial model, and information for due diligence is exceptionally time-consuming and taxing. An advisory firm provides the additional bandwidth to prepare all of it while you keep growing your agency. And there is an important distinction worth noting: an M&A advisory firm acts as a strategic partner through every phase of the process, which is different from a broker who may simply list your business and wait for interest. → Related: How to Choose a Home Care M&A Advisor 5. Ensure Easy Access to Critical Diligence Information Even with an advisory firm handling the heavy lifting, you will need to provide the raw information: accurate financials, operational metrics, licenses, contracts, and compliance records. Buyers and their teams will scrutinize every detail. Assuring this data is clean, accurate, and accessible will put you ahead from day one. It signals professionalism and reduces the risk of delays or price adjustments during due diligence. → Related: What Strategic Buyers Really Look For in Home Care M&A Considering the five items above will better prepare every care-at-home agency owner to plan and execute a successful exit strategy. Key Takeaways: • Define and rank your exit goals before engaging with any buyer. • Reduce owner dependency to lower transition risk and increase value. • Evaluate buyers on fit, experience, and financial capacity, not just price. • Choose an M&A advisory firm with deep healthcare transaction experience. • Organize your financials, licenses, and operational data before going to market. Ready to Start Planning Your Exit? Mertz Taggart has guided owners through healthcare services M&A transactions across home care, home health, and hospice for over twenty years. If you are considering a sale of all or a portion of your agency, we welcome a confidential conversation about your goals and timeline. Contact us to get started.

Behavioral Health M&A Executive Summary: A Year of Resilience and Reality Checks A total of 42 closed transactions — 34 traditional M&A deals and 8 growth deals — were reported in Q1 2026. Traditional M&A volume increased from 29 closed deals in Q4 2025, though it remained below the 40 deals closed in Q1 2025. The 8 growth deals carried a combined disclosed value of approximately $535.7 million, led by major financing rounds for Talkiatry and Grow Therapy, signaling continued institutional conviction in scaled virtual behavioral health platforms. "Q1 was a solid start to the year — not a blowout, but active. Traditional deal volume bounced back from Q4, and what stands out to me is how concentrated the mental health activity is becoming around platform builders. Beacon Behavioral closed four add-ons in a single quarter, and you're seeing the same pattern across ABA. On the growth side, Talkiatry and Grow Therapy together raised $360 million. That's a signal that institutional capital still has a lot of appetite for virtual and tech-enabled delivery models at scale." — Mertz Taggart Managing Partner Kevin Taggart said. Mental health led all sub-sectors with 19 closed traditional M&A deals, followed by Autism/IDD with 10 and Addiction Treatment with 5. PE-backed strategics and platform builders drove the bulk of transaction volume, consistent with the consolidation patterns seen throughout 2025. Addiction Treatment M&A Five addiction treatment deals closed in Q1 2026, down from 7 in Q4 2025 and 8 in Q1 2025. The subdued volume reflects ongoing caution among SUD-focused buyers, many of whom continue to work through platform integrations before resuming add-on activity. "SUD deal flow has been building momentum, and the buyers we're talking to are increasingly motivated to get back into the space. Some platforms that were focused on integration over the past couple of years are starting to look at add-ons again, and we're seeing new entrants with capital ready to deploy. For a quality addiction treatment provider considering a sale, I think the timing is actually quite good — there's demand out there and it's growing." — Taggart said. The most notable deal of the quarter was Mayfair Group's acquisition of Praesum Healthcare, a Florida-based multi-state addiction treatment platform operating more than 30 centers across the Eastern U.S. under brands including Sunrise Detox, The Counseling Center, and Evolve Recovery Center. Praesum had filed for Chapter 11 bankruptcy in August 2025 and was acquired out of the bankruptcy auction for $18.5 million. Additional Q1 addiction treatment transactions: ● Lee Equity Partners-backed Bradford Health Services acquired Parkdale Center, expanding its inpatient SUD footprint. ● Victory Recovery Partners acquired Realization Center, an addiction treatment provider with locations in Manhattan and Brooklyn, continuing its multi-specialty behavioral health rollup in the Northeast. ● Xolani acquired Welwynn Outpatient Center in the outpatient SUD space. ● Doctor Staffers LLC acquired TAKS Care Group. Mental Health M&A Nineteen mental health deals closed in Q1 2026, down from 24 in Q1 2025 and roughly in line with the 18 closed in Q4 2025. The sub-sector continues to account for the majority of BH transaction volume, driven by active PE-backed platform builders and a growing number of nonprofit strategic combinations. Latticework Capital-backed Beacon Behavioral Partners was the most active acquirer in the quarter, closing four add-ons: Carolina Psychiatry, SunCoast Psychiatry, Novus Neurology, Psychiatry, & TMS, and one yet to be named acquisition — all in outpatient psychiatry. Mertz Taggart provided exclusive sell-side advisory services in the acquisition of an outpatient mental health platform. The parties have requested confidentiality. Other notable closed mental health transactions: ● Goldman Sachs Asset Management formed a new platform with LearnWell, a provider of behavioral health services for students in hospital and therapeutic day school settings. ● Cerebral acquired Get Inflow, a digital ADHD-focused platform, continuing its build-out of condition-specific virtual care offerings. ● Quantum Health acquired CirrusMD, adding text-based virtual care to its navigation platform. ● Harbor Health acquired Rippl Care, a dementia-focused behavioral health provider. ● Nocd acquired Rebound Health, expanding its OCD-focused digital platform. ● Victory Recovery Partners acquired North Shore Relationship Center, a group therapy practice in Port Jefferson, New York. ● Chimes International acquired Family Focus, a community-based mental health and social services provider. ● Omni Family of Services acquired Justiceworks Youthcare, a youth-focused mental health provider. ● New View Alliance (formerly Gateway-Longview) acquired New Directions Youth and Family Services, continuing its nonprofit consolidation strategy in children's behavioral health. ● Proficio Therapy Services acquired Child's Play Therapy Services, a pediatric outpatient practice. ● WVU Medicine Wheeling Hospital acquired Orchard Park Hospital, an inpatient psychiatric facility. Also announced — but not yet closed — was Universal Health Services' (UHS) agreement to acquire Talkspace for approximately $835 million. Talkspace operates a nationwide virtual behavioral health platform with roughly 6,000 licensed professionals and generated $229 million in revenue in 2025 and $15 million in EBITDA, which translates to an eye-popping approximately 56x multiple . Expected to close in Q3 2026, the deal reflects the broader thesis that large health systems are moving to integrate virtual outpatient behavioral health capacity with their existing inpatient infrastructure. Also announced was Spring Health's agreement to acquire Alma, a mental health marketplace that would significantly expand Spring Health's provider network. On the growth side, mental health attracted six of the quarter's eight venture rounds. Talkiatry raised a $210 million Series D led by Perceptive Advisors — bringing total funding to over $400 million — to expand its employed-psychiatrist model, which now includes more than 800 full-time W-2 psychiatrists in-network with over 100 insurers. Grow Therapy raised a $150 million Series D led by TCV and Goldman Sachs Alternatives at a reported $3 billion valuation. Salma Health raised $80 million from ARCH Venture Partners. Smaller rounds were completed by Somethings ($19.2M), Jimini Health ($17M), and Coral Care ($13M). Autism and Intellectual/Developmental Disabilities M&A Ten Autism/I/DD deals closed in Q1 2026, up from 7 in Q4 2025 and below the 12 closed in Q1 2025. New PE platform formations and continued ABA consolidation remained the primary drivers. "ABA and I/DD continue to attract serious buyer interest — three new PE platforms launched in the space in Q1 alone, which tells you something about where institutional capital is placing its bets. Buyers are doing their diligence carefully, but well-run practices with solid clinical outcomes and clean financials are still generating competitive processes. We're also seeing growing interest in HCBS and community-based I/DD models as buyers look to build out the full continuum." — Taggart said. Three new PE platforms were formed in the space during Q1. Momentum Health Partners launched with the acquisition of Advanced Autism Center for Treatment (AACT). Aquitaine Capital formed a new platform with KidsChoice, an ABA and behavioral therapy provider. Elysium Management LLC formed a platform with InBloom Autism Services (formerly Behavior Development Group), a multi-state ABA provider. Centerbridge Partners, Vistria Group, and Madison Dearborn-backed Sevita (formerly The Mentor Network) completed the acquisition of RES-Care Community Living, a significant I/DD and home- and community-based services combination that expands Sevita's national HCBS and supported living footprint. Additional Q1 Autism/I/DD transactions: ● General Atlantic-backed ACES acquired Ally Pediatric Therapy, continuing its ABA and pediatric therapy expansion. ● Center for Social Dynamics acquired Behavior Change Institute (BCI). ● Renovus Capital Partners-backed Behavioral Framework acquired Autism ETC. ● Step Forward ABA acquired MySpot (NC and VA locations). ● The Verland Foundation acquired Triad Behavior Support Services, a nonprofit I/DD strategic combination. ● NCG Care acquired community-based operations from Broadstep Behavioral Health. On the growth side, Answersnow raised $40 million from HealthQuest Capital to expand its telehealth-based ABA platform, and Avela Health raised $6.5 million from Artemis Fund. If you are interested in downloading the PDF version of the Q1 2026 Behavioral Health M&A Report, click the download link below:

By Cory Mertz, Managing Partner, Mertz Taggart At a Glance Maximizing the value of your home health, hospice, or home care agency comes down to two things: building value over time and capturing it through a disciplined sale process. Value is determined by the equation Enterprise Value = Adjusted EBITDA x Multiple, where the multiple reflects buyer-perceived risk. Owners who grow revenue, manage margins to the EBITDA sweet spot, diversify referral sources, and separate themselves from day-to-day operations can significantly increase what their agency commands. Equally important is how you go to market: a confidential competitive bid process with A-list buyers consistently delivers stronger outcomes than negotiating with a single buyer. You spend years, sometimes decades, building something valuable. But how you go about selling it can make all the difference between a good outcome and a great one. I break maximizing value into two distinct phases: building value and capturing value. Most owners are already doing the first part every day. It is the second part, the sale process itself, that does not get talked about nearly enough. What Is the Valuation Equation for a Home Health or Hospice Agency? The fundamental valuation equation is straightforward: Enterprise Value = Adjusted EBITDA x Multiple. Adjusted EBITDA is the normalized cash flow your agency produces, as if the buyer already owned it, before any synergies. The multiple is an inverse measure of risk. The lower the perceived risk that cash flow will decline after a sale, the higher the multiple a buyer will pay. I like to break this down further: Revenue x EBITDA Margin x Multiple. Each of those three levers can be improved independently, and the compounding effect can be significant. A Real-World Example: From $7.5M to $14M I met a Medicare Home Health agency owner at a conference in 2018. His magic number was $10 million. When we evaluated the agency, it was doing about $8.5 million in revenue with a 16% EBITDA margin. At a conservative 5.5x multiple (at that time), that put guidance around $7.5 million. Not quite there. We agreed he had some work to do. He focused on facility referrals, prepared for PDGM, and growing the business. By late 2020, he had taken revenue to $10 million and improved margins to 20%. The market had also strengthened. He ultimately received a 7x multiple and $14 million in enterprise value, 87% more than the original guidance. That happened by moving all three levers: revenue, margin, and multiple. → Related: It’s All About the Multiple (…Or Is It?) Why Does the Type of Financial Consideration Matter? Not all enterprise value is created equal. Cash at close is what matters most. Any other form of consideration, whether it is seller financing, an earn-out, or a contingent payment, needs to be discounted. Sometimes significantly. Most transactions include a holdback, typically held in escrow with the seller's name on it. The buyer has to make a formal indemnification claim and prove damages to access any of that money, which makes it relatively secure. Where sellers run into trouble is with cash-strapped buyers who want to structure holdbacks as seller notes, request seller financing, or rely heavily on earn-outs. An earn-out or contingent payment, in my opinion, should be considered icing on the cake. If the business falls off post-close, you may never see that money. What Are the Most Common Ways to Build Value? Grow the Business Revenue growth directly increases the EBITDA numerator and also drives a higher multiple. Bigger companies command higher multiples because they have the infrastructure to absorb setbacks. Publicly traded home health companies have traded at multiples ranging from the mid-teens to the mid-30s. A smaller agency with concentrated risk will trade for far less. Growing the company addresses both sides of that gap. Manage Your Margins Start measuring gross margin and net margin if you are not already. Gross margin is what remains after the cost of care: clinicians, caregivers, mileage, supplies. Net margin is what remains after overhead. Target margin ranges that buyers find attractive: Sector Gross Margin EBITDA Margin Home Health 45-50% 15-25% Hospice 45-55% 15-25% Home Care Lower than HH/hospice* 10-20% Diversify Referral Sources and Clients A company with a hundred referral sources will typically command a higher multiple than one with ten. On the home care side, an agency with many lower-hour clients is generally more attractive than one relying on a handful of 24/7 cases. Concentration is risk, and buyers price risk into the multiple. Separate Yourself from Marketing and Day-to-Day Leadership This is one of the biggest drivers of the multiple. If the owner is the primary marketer and operator, buyers see significant transition risk. Even if they convince you to stay on after the sale, your motivation as a former owner is different. The more the business can run without you, the higher a buyer will pay for it. Build a Transition-Proof Business Make sure your key employees and managers are aligned and motivated to stay. Stay bonuses, even modest ones relative to the overall transaction, give buyers comfort that the team will remain intact. Bringing one or two key people into your circle of trust, and giving the buyer the chance to meet them, can go a long way toward de-risking the deal. Consider an Acquisition An acquisition can move all three levers at once. Revenue grows when you add patients and clinicians. Margins often improve when you eliminate redundant overhead, especially in your own market or a contiguous one. And a bigger company commands a higher multiple. It is a big undertaking, but it checks all the boxes. → Related: Your Company Might Be Great. That Doesn’t Mean It’s Valuable. How Do You Capture Maximum Value When Selling? Building value is what you do over years. Capturing value is what happens in the final five to eight months. This is the part most owners do not spend enough time on, and it is where the process can make a dramatic difference in your outcome. Who Are the A-List Buyers? A-list buyers check three boxes: they have cash (or easy access to credit), they operate in your industry or an adjacent one, and they have done deals before. In practice, this means publicly traded companies and financially backed strategic buyers, companies backed by private equity or family offices. There are roughly 50 to 60 A-list buyers across the country in the home-based care space. Why Does a Competitive Process Matter? You want to avoid a monopsony, which simply means dealing with only one buyer. When multiple qualified buyers are competing for your agency, you get better pricing, better terms, and more leverage throughout the process. The process works like this: reach out to all A-list buyers confidentially with a teaser document that includes an executive summary and high-level financials but not enough to identify the agency. Interested buyers sign a non-disclosure agreement. Then you provide a Confidential Information Memorandum, typically a 25- to 60-page deck covering the agency's history, financials, patient metrics, key employees (no names), and referral information (no names). That document also includes a process letter, which tells buyers this is a competitive process, sets an offer deadline (usually four to five weeks), and spells out what the letter of intent needs to include. What Should You Look for When Meeting Buyers? Once the serious buyers emerge, meet them face to face if possible. Schedule meetings back to back. This gives them a chance to ask detailed questions and gives you an opportunity to gauge which buyer is truly the best fit. It also reinforces that this is a competitive process. During these meetings, be upfront about any potential issues. You do not want a buyer discovering something in due diligence that you could have disclosed earlier. Getting everything on the table builds trust and reduces the risk of renegotiation down the road. Beware the uninformed buyer. Buyers who are not experts in the industry will find things late in the process that can upset the deal. Buyers who approach sellers directly and make offers based on very little information are especially concerning. You want buyers who know the industry cold. → Related: How to Sell Your Home Care Agency: 3 Proven Exit Strategies from Private Equity How Do You Get to the Closing Table Without Renegotiating? Once you select a buyer and sign a letter of intent, you enter an exclusivity period, typically 60 to 120 days. You are locked in with that buyer. Everything you can do before signing the LOI to eliminate blind spots will pay off during this phase. Having backup offers from the competitive process keeps the selected buyer honest. You do not need to mention it in an unprofessional way, but a subtle reminder that other conversations took place goes a long way. Bring one or two key employees into the circle of trust. Due diligence is a lot of work, and you need to keep running the company at the same time. A trusted employee with access to the data you need can take a significant burden off your shoulders. Incentivize them with a stay bonus so they are motivated to stick around through the close and beyond. Be ready to produce standard diligence information quickly. Time kills all deals. Due diligence checklists can run anywhere from 100 to 300 line items, so it’s important to know where everything is before that checklist arrives. Most importantly, maintain strong admissions and hours through the process. If the business starts to fall off, even a little, buyers may question the value. The best deals grow through diligence, and that gives sellers maximum leverage when negotiating the final purchase agreement. Key Takeaways Value is determined by Enterprise Value = Adjusted EBITDA x Multiple. All three levers (revenue, margin, multiple) can be improved independently. Target EBITDA margins of 15-25% for home health and hospice, 10-20% for home care. Margins outside these ranges can raise questions with buyers. Cash at close is what matters. Earn-outs, seller notes, and contingent payments should be considered icing on the cake. Owner dependence is one of the biggest risks buyers price into the multiple. Separate yourself from marketing and day-to-day leadership. A confidential competitive bid process with A-list buyers consistently outperforms negotiating with a single buyer. Time kills all deals. Have your diligence materials organized and maintain strong admissions throughout the process. Ready to Talk About Your Exit? Mertz Taggart has spent over twenty years advising home health, hospice, home care, and behavioral health owners through the sale process. If you are contemplating an eventual sale, or if you just want to understand where your agency stands today, we are happy to have a confidential conversation.

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 posted revenue of $363.6 million for the quarter, up 7.7% from Q1 2025. Growth was led by the Personal Care segment, which represents 77.3% of the business and grew 8.8% overall and 6.5% on a same-store basis, supported by rate increases in Illinois and Texas, the company’s two largest markets. The Illinois increase of 3.9%, effective January 1, adds approximately $17.5 million in annualized revenue, while Texas implemented a 9.9% increase effective September 1. The Hospice segment, representing 18.1% of quarterly revenue at $65.8 million, grew same-store revenue 7.7% year-over-year, with average daily census increasing 8.2% to 3,804 and a median length of stay of 23 days. The Home Health segment, representing 4.6% of the business at $16.7 million, saw a same-store revenue decline but improved operating income both year-over-year and sequentially. Over 25% of the company’s hospice admissions in New Mexico and Tennessee now originate from its own home health operations through its bridge program. Adjusted EBITDA came in at $44.5 million, a 9.7% increase over the prior year quarter, with adjusted EBITDA margin of 12.2%. Adjusted earnings per share rose 14.1% to $1.62, and gross margin was 31.9%, consistent with the first quarter of 2025. Key Financial Figures M&A Activity On May 1, Addus closed the acquisition of the personal care operations of HomeCourt HomeCare, based in Fort Wayne, marking the company’s entry into Indiana, a state adjacent to its largest personal care market of Illinois. HomeCourt serves approximately 240 clients with annual revenues of approximately $9.7 million. The company has also entered into a definitive purchase agreement for a second Indiana personal care operation of similar size, expected to close later this year; together the two transactions represent just under $20 million of revenue. Management pointed to a shift in the size of opportunities reaching the market. Asked whether the pipeline was skewing larger, CEO Dirk Allison said, “there’s already two or three opportunities out there that are of size that we’re looking at, I think it’s really something that changed probably in the last three months or so where we’re seeing processes begin on these larger opportunities,” and confirmed those assets are similar in size to Gentiva. Guidance Management anticipates gross margin will remain relatively stable and consistent with its historical annual pattern, and expects full-year adjusted EBITDA margin to remain above 12%. The full-year tax rate is expected to be in the mid-20% range. Aveanna Healthcare (Nasdaq: AVAH) Highlights Aveanna reported Q1 2026 revenue of $647.9 million, a 15.9% increase over the prior year period, with year-over-year growth in all three operating divisions. Adjusted EBITDA rose 25.2% to $84.4 million, reflecting an improved rate environment, increased volumes and enhanced operational efficiencies. Consolidated gross margin was $205.4 million, or 31.7%. The Private Duty Services segment, representing 83% of the business, grew 16.4% to approximately $536 million, driven by a 10.7% volume increase to approximately 12.1 million hours of care and a 5.7% increase in revenue per hour to $44.43. Cost of revenue per hour rose 8.1% to $32.05, leaving spread per hour of $12.38 as the company continued to pass wage adjustments through to caregivers. The Home Health & Hospice segment grew 17.4% to approximately $66.6 million on 11,000 total admissions, approximately 80% of which were episodic, and 14,900 total episodes of care, up 23.1% from the prior year quarter. Revenue per episode was $3,167 and segment gross margin was 53.7%. Medical Solutions grew 7.4% to $45.7 million on approximately 93,000 unique patients served. The company’s preferred payor strategy continued to advance, with four agreements signed in Private Duty Services during the quarter. Preferred payor agreements now account for approximately 60% of total Private Duty Services MCO volumes, up from 57% at the end of 2025, against a 2026 goal of 38 agreements. In home health, Aveanna added four additional preferred payor agreements and is tracking ahead of its goal of 50 for the year. Key Financial Figures M&A Activity Aveanna’s pending acquisition of Family First Home Care, a Florida-based provider of in-home pediatric care, continues to work through the regulatory approval process and is expected to close in late Q2. CFO Matt Buckhalter said the transaction was valued at “about seven and a half times post-Synergy EBITDA,” with revenue “sitting around the $120 million mark,” and noted it takes approximately six months to reach a full run-rate basis on synergies. Beyond Family First, Buckhalter signaled limited additional appetite for the balance of the year, noting there remains free cash flow available for “small token acquisitions, but beyond Family First this year, probably nothing monumental.” Guidance Management raised full-year 2026 guidance to revenue of $2.56 billion to $2.58 billion and adjusted EBITDA of $328 million to $332 million. The Pennant Group, Inc. (Nasdaq: PNTG) Highlights Pennant Group reported total revenue of $285.4 million for the quarter, an increase of $75.5 million or 36% over the prior year quarter. Adjusted EBITDA grew 32.6% to $21.7 million, or $23.5 million prior to non-controlling interests, up 37.2%. Adjusted diluted earnings per share rose 18.5% to $0.32, while GAAP net income increased 9.6% to $8.5 million and adjusted net income rose 19.8% to $11.5 million. The Home Health and Hospice segment, now reported on a combined basis, delivered revenue of $229.1 million, an increase of $69.2 million or 43.3%, with segment adjusted EBITDA of $33.6 million, up 33.7%, and $35.4 million prior to non-controlling interests. The Senior Living segment grew revenue 12.6% to $56.3 million, with adjusted EBITDA up 30.6% to $6.4 million and segment adjusted EBITDA margin improving 190 basis points to 11.8%. Same-store occupancy rose 180 basis points to 81%, while all-store occupancy reached 78.6%. Pennant added 101 CEOs in training to its development program in 2025 and 47 more year to date in 2026. The company now has 55 local CEOs and 92 other C-level leaders across its operations. Key Financial Figures M&A Activity The transition of the 54 home health, hospice and home care operations acquired from UnitedHealthcare in Tennessee, Alabama and Georgia is two of five waves complete, with the process expected to be finished by the end of the third quarter. Despite an EMR transition, lower seasonal admissions over the holidays and severe January weather, total census has increased above the levels at the time of acquisition. In senior living, Pennant completed four acquisitions after quarter end. On April 1, the company acquired the operations and real estate of Lavender Lane Senior Living, which includes 43 assisted living and memory care units and 25 independent living units, strengthening its Phoenix area portfolio. On May 1, three additional communities joined through triple-net leases with capital partners: a 100-unit community in Glendale, Arizona now operating as Saguaro Senior Living, and two Wisconsin communities of 45 and 50 units now operating as Cardinal Lane Senior Living and Harbor Haven Senior Living. Management expects to remain an acquirer of senior living assets throughout the year. President and COO John Gochnour said, “While integration remains our primary focus, we continue to evaluate a pipeline of home health and hospice tuck-ins and potential joint ventures with integrated." Guidance Management did not adjust guidance, but with only one quarter complete and substantial transition work ahead, directed investors to the upper end of its range. BrightSpring Health Services, Inc. (NASDAQ: BTSG) Highlights BrightSpring posted total revenue of $3.6 billion for the quarter, up 26% year-over-year, with adjusted EBITDA of $190 million, a 45% increase, and adjusted EBITDA margin of 5.3%, a 70 basis point improvement driven primarily by mix and operational efficiencies. Adjusted earnings per share were $0.39. Results reflect continuing operations and exclude the divested Community Living business. Pharmacy Solutions grew revenue 25% to $3.2 billion, with segment adjusted EBITDA of $169 million, up 46%. Specialty and infusion revenue grew 36% to $2.6 billion, driven by strength in specialty, market adoption of existing limited distribution drugs, new LDD wins, brand-to-generic conversions and growth in fee-for-service programs. The company added four exclusive and ultra-narrow LDDs in the quarter, bringing its total to 153. ▪ Provider Services grew revenue 28% to $442 million, with segment adjusted EBITDA of $66 million and a margin of 14.9%. Home Health grew 49% to $266 million on strong census growth, de novo expansion, preferred Medicare Advantage contracts and the ongoing integration of acquired branches, which contributed $79 million of revenue and approximately $9 million of adjusted EBITDA in the quarter. Rehab grew 7% to $75 million and Personal Care grew 4% to $102 million. Key Financial Figures M&A Activity BrightSpring completed the sale of Community Living to Sevita on March 30, generating approximately $811 million of net cash proceeds before tax, with approximately $100 million of associated taxes payable in the second quarter. Proceeds are being used to strengthen the balance sheet through debt paydown and cash availability. Leverage declined to 2.27x as of March 31 from 2.99x as of December 31, or 2.40x on a pro forma basis for the tax payment. The pending divestiture of the company’s Community Living business received FTC approval and is Integration of the acquired Amedisys and LHC branches continues, with management expecting approximately $30 million of adjusted EBITDA contribution in the first year. Guidance Management raised full-year 2026 guidance to total revenue of $14.725 billion to $15.225 billion, including Pharmacy Solutions revenue of $12.85 billion to $13.3 billion and Provider Services revenue of $1.875 billion to $1.925 billion. Total adjusted EBITDA is now expected to be in the range of $795 million to $825 million, reflecting 28.7% to 33.6% growth over full-year 2025 excluding Community Living in both years. Option Care Health, Inc. (NASDAQ: OPCH) Highlights Option Care posted first quarter revenue of approximately $1.4 billion, up slightly over 1% compared to the prior year, which did not meet management’s expectations. Adjusted EBITDA of $105 million declined 6% year-over-year but was in line with the company’s expectations, and adjusted earnings per share of $0.40 was flat with the prior year, including a two-cent uplift from share repurchases. Acute therapy revenue grew in the high single digits, well above market growth, supported by stronger capabilities to transition patients onto service and broader referral source relationships. Chronic therapy revenue declined slightly, with the chronic inflammatory disease portfolio reducing total company revenue growth by approximately 600 basis points. The CID shortfall reflected a significantly higher volume of patients with insurance plan, benefit design or formulary management changes, doubling the number requiring benefit re-verification and reauthorization versus last year. This elongated approval decisions into late March, reduced patient census more than anticipated and left a less favorable therapy mix among the remaining census. Management noted that given the recurring nature of chronic therapy revenue, an unfavorable census decline takes time to recover. The company was also notified of launch delays or slower ramps across several rare and orphan programs. Ambulatory infusion clinic utilization continued to increase, with visits growing 14% year-over-year and 28 locations now operating with advanced practitioner capabilities. The company conducted 34% of its nursing visits in one of its suites or clinics during the quarter, and continues to add to a portfolio of more than 600 therapies. Patient satisfaction scores remained in the low 90s with net promoter scores in the mid 70s. Key Financial Figures M&A Activity Capital allocation priorities begin with organic investments to drive revenue growth, capacity and cost structure optimization, followed by acquisitions focused on adjacencies and tuck-ins, with periodic share buybacks last. The company repurchased over $17 million of shares during the quarter and expanded its revolving credit facility from $400 million to $850 million to better align its capital structure with its capital allocation strategy. Net debt to leverage was 2.2x. Guidance Management lowered full-year net revenue guidance to a range of $5.675 billion to $5.775 billion, incorporating a negative 600 basis point revenue growth headwind, higher than the 400 basis points previously estimated, due to lower CID patient retention and therapy mix. Full-year adjusted EBITDA guidance was maintained at $480 million to $505 million. The CID gross profit headwind is now estimated at approximately $55 million for the year, up from a prior estimate of $25 million to $35 million, and is expected to be realized evenly through the year. 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. 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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.