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 $6.03 million in EBITDA, which translates to an eye-popping approximately 138x 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 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.

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.

By: Bruce Vanderlaan While this has been a pretty volatile year in the M&A world, demand for small- to mid-sized home-based care agencies remains high. You can tell by the sheer volume of calls and emails you have been getting from “advisors” who tell you they have a buyer for you, or they can get you what looks like a very attractive multiple. In this environment, potential sellers need to be keenly aware of the “broker bait-and-switch” that is becoming more common in the home health, home care, and hospice industries. At the very least, those reaching out to you with promises of “interested buyers” or high multiples (all without knowing anything more than your website) should, at the very least, be cautiously received. Here is how the broker bait-and-switch usually goes: ● An M&A ‘broker’ approaches a seller with the promise of an interested buyer, multiple interested buyers, or even a specific buyer looking to pay a steep price for that seller’s agency ● To find out who the buyer is, the broker forces the seller to enter into an agreement of some kind ● After the seller enters that agreement, they will likely be forced to pay a fee to that broker down the line when an acquisition takes place with whomever they bring to the table There are multiple problems with this process. First, it’s highly unlikely the broker actually has a specific buyer who has already made contact. In this equation, the promise of that specific buyer is the “bait.” Once the seller has entered into the agreement, the broker can turn around and play the same game with potential buyers. That’s the “switch". The broker will notify a group of buyers that it has an interested seller, blasting out an advertisement of sorts of an interested seller. Sellers — and buyers, for that matter — are likely to find this sort of process expensive, confusing, burdensome, and unprofessional. It leaves owners dissatisfied and fatigued after selling their agency, a chance they may only get once. Essentially, the broker is intent on making a fee, regardless of who pays it. Many of these brokers are simply “transaction” brokers. Meaning, they represent the transaction, not you, and not the buyer. A legitimate M&A advisory firm will put significant effort into maximizing value for the seller, and the results can be significant. There is a lot of work that goes into going to market the right way, ensuring that the agency is ready for due diligence and that the transaction has a high likelihood of closing. Finding Buyers is the Easy Part To avoid succumbing to this trick, the first thing that sellers need to understand is that the pressure is not nearly as high as the broker makes it seem. After all, there is always strong interest in the M&A marketplace for quality agencies. There are plenty of strategic buyers and PE firms regularly looking for quality home health, home care, and hospice assets. The allure of an “interested buyer” should generally be ignored when no details are given. In fact, having “one” interested buyer is almost never in a seller’s best interest. When an owner is looking to sell, they should expect a transparent and competitive process from the outset. An experienced M&A advisory firm or investment banker should lead that process and engage with multiple buyers in order to get the best price and terms for the agency at the end of negotiations. That also allows the seller — and not the broker, who may just be looking for a fee via the broker bait-and-switch — to choose the best buyer. That choice will involve price, cultural alignment, certainty to close, post-closing obligations, and a host of other factors. Without backup offers, buyers are hardly likely to raise their offers or make compromises on other seller wishes. They are also more likely to negotiate on the basis of what is ‘reasonable’ versus what is ‘market’, determined by a professional, competitive, process. How to navigate the process Sellers should not enter into vague agreements, no matter how eager they are to negotiate with so-called “interested buyers.” In order to ensure the process goes smoothly, they need to ask the right questions to the broker: ● Who is the buyer? ● Did the buyer ask you to contact us, specifically? ● Why is my company strategically interesting to them? ● How did the buyer determine the price or multiple? ● Is the buyer paying your fee? If the broker cannot or will not answer the above questions, sellers should reevaluate the situation before agreeing to anything. If it seems too good to be true… The vast majority of the time, a respectable M&A advisor should not have any problem answering those questions from the start. If they do, they likely do not have the sellers’ best interests in mind. Instead, they are likely looking to capitalize on their fees, and not much else. This is likely going to be one of the most major life decisions an agency owner makes, and it usually only happens once. It makes sense to be cautious and informed. My rule, that it took me a lot of pain to learn, is that if I am being pressured to make a decision, the answer has to be “no.”

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

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

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

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

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

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

Mertz Taggart Home Health, Home Care & Hospice M&A Update for Q3 2021 With both the height of the COVID-19 pandemic and the start of the Patient-Driven Groupings Model (PDGM) now in the rearview mirror, in-home care buyers and motivated sellers are finding it easier to come together on deals. There were 44 total home health, hospice and home care transactions completed in the third quarter of 2021, up from the 41 deals that took place in the previous quarter. Over the past three years, the only quarter with more transactions was 2020 Q4. “All three sub-industries remain strong, but the increased activity has little to do with increased demand,” Mertz Taggart Managing Partner Cory Mertz says. “Demand has been strong for several quarters and continues. This is a supply-driven market.” Note: Total industry transactions does not necessarily equal the sum of the sub-industries, as many transactions include more than one sub-industry. There are a few main factors helping drive supply in the back half of 2021. For starters, there’s the likely increase in the capital gains tax rate. When put in effect, it will diminish a prospective seller’s return or force them to place a bigger price tag on their business, in turn limiting buyer interest. What remains unknown is when this hike will go into effect, and its severity. “The Biden administration came out of the gate with some pretty draconian targets,” Mertz says. “The current “Build Back Better” reconciliation package is still in negotiations, but it appears to be much less severe than the original targets.” However, he adds, it’s quite possible that the effective date is already in the rearview mirror, with the current package delayed in congress. In addition to a capital-gains tax increase , the COVID-19 pandemic is nearly entering its second year, bringing sustained operational difficulties. “We’ve heard from many owners who are feeling a sense of burnout,” Mertz says. “Maybe they were already thinking about a sale in the next couple of years, but then the ongoing pandemic just accelerated their timelines.” Looking ahead, home health supply may be bolstered even further by the proposed Home Health Value-Based Purchasing (HHVBP) Model expansion as well. Franchise deals headline home care M&A activity There were at least 18 home care-related transactions in Q3 2021, according to Mertz Taggart data. That was on par with the previous quarter, which registered 19 home care deals. One of the splashiest home care transactions in the third quarter was Honor’s acquisition of Home Instead Senior Care . Combined, the Honor-Home Instead enterprise represents more than $2.1 billion in home care services revenue, according to the companies. Private equity group Searchlight Capital Partners also acquired a majority stake in Care Advantage in the third quarter. Care Advantage offers a variety of in-home care services to patients across Virginia, Maryland, Washington, D.C., and Delaware. ModivCare Inc . (NYSE: MODV) closed on a $340 million purchase of CareFinders Total Care early on in Q3, advancing the publicly traded company’s plan to become one of the largest personal care services providers in the country. ModivCare purchased Simplura Health Group in September 2020. A key theme to the home care M&A landscape throughout this year has been lots of activity around franchisors. “The third quarter saw another franchisor acquired in Home Instead” Mertz says. “That brings the total number of franchisors who have sold in 2021 to three, compared to just three in the previous five years. Franchisors give financial buyers both immediate scale, which can be leveraged, and the ability to quickly grow EBITDA via acquisition of both existing franchisees and independents. This is a model that has been proven by other PE groups.” Home health transactions up The home health sub-sector saw a noticeable spike in dealmaking. Mertz Taggart tracked at least 16 home health-related deals in Q3 2021, on par with Q2. Home health M&A activity is likely to remain robust moving into 2022, especially if the U.S. Centers for Medicare & Medicaid Services (CMS) finalizes its plan to expand HHVBP to all 50 states. “As part of its basic framework, the HHVBP proposal exposes home health agencies to a 5% upward or downward payment adjustment,” Mertz says. “Agencies that perform well can take any bonus payments and reinvest in the business or in M&A. Those who don't perform well effectively pay a penalty to those who do." LHC Group Inc. (Nasdaq: LHCG) made a flurry of deals in August, including the purchase of Alexandria, Virginia-based Cavalier Healthcare Services . Strategically, the acquisition opens up a new service area for LHC Group, allowing it to better leverage its operations in the Washington, D.C., and Maryland markets. Mertz Taggart provided exclusive transaction advisory services in this transaction, representing the seller. In July, the Visiting Nurse Association (VNA) — a nonprofit provider in Omaha, Nebraska, and Council Bluffs, Iowa — sold its home health and hospice operations to Amedisys Inc. (Nasdaq; AMED). Under the terms of the transaction, VNA’s home health and hospice services rebranded to “Amedisys Home Health” and “AseraCare Hospice, an Amedisys Company,” respectively. Mertz Taggart provided buyside advisory services to Amedisys in this transaction. The biggest home health-related deal in Q3 2021 also came from LHC Group. In September, the company announced it was acquiring 23 home health locations, 11 hospice agencies and 13 therapy businesses from Brookdale Senior Living Inc . (NYSE: BKD) and HCA Healthcare (NYSE: HCA). The transaction represented annualized revenue of about $146 million, according to the company. Hospice dealmaking takes another leap There were at least 23 hospice-related deals in Q3 2021, up from 17 transactions in Q2. Since the start of 2018, no quarter has seen more hospice M&A activity apart from the fourth quarter of last year, which tallied 29 hospice-related transactions. The pure-play hospice transactions in Q3 included Agape Care’s purchase of Integrity Hospice-Dubin , in addition to Charter Healthcare Group’s acquisition of Generations Hospice Care. “Humana Inc. (NYSE: HUM) additionally completed its $8.1 billion acquisition of Kindred at Home in this previous quarter,” Mertz says. “That’s a deal to keep an eye on from a hospice perspective, as Humana has discussed plans to separate Kindred’s hospice operations.” Entering the final stretch Of the 44 home health, hospice and home care transactions in Q3 2021, private equity buyers and their portfolio companies led the way with 25 deals. Public companies like LHC Group, Amedisys and others took part in at least 16 transactions. “We predicted a very strong finish to an already-strong year,” Mertz says. “The third quarter did not disappoint.”

A steady second half of 2020 bodes well for 2021. Behavioral health M&A remained steadily active in the fourth quarter of 2020, with a total of 27 transactions, according to the latest data from M&A advisory firm Mertz Taggart. Announcements in addiction treatment led the segment in Q4 with some large groups moving forward on multiple acquisition deals. The year finished with 97 transactions overall. 2020’s total number of deals were comparable to those in the previous two years, despite a global pandemic. In 2019, the segment witnessed 97 announcements, and in 2018 an even 100. “The second half of 2020 was as strong as we’ve seen ,” said Mertz Taggart Managing Partner Kevin Taggart. “ Combine that with the threat of a near-term capital gains tax hike, and we expect an active 2021.” He said new partnerships and access to capital will become especially important in the months to come as healthcare providers emerge from the coronavirus pandemic with a more competitive landscape than before. “We know that financial mechanisms have been shifting,” Taggart said. “While loans and operating income remain the primary sources of capital, private equity investment could be the important variable that contributes to a more optimistic outlook for many behavioral health providers.” Taggart believes the continued infusion of private equity assets combined with a clear forecast of pent-up demand for services will offer a boost to revenue by mid-year. Yet, providers that are able to build capacity quickly will also need to be resourceful in how they approach the imbalance of supply and demand, leveraging technology and strong operational sophistication. “We see additional evidence of a positive outlook in behavioral health based on the number of new center openings across the country,” Taggart continued. “And these are brick-and-mortar locations, banking on an increase in in-person services, even as they continue to rely on telehealth visits.” With an anticipated surge in demand, new center openings and private equity interest, Taggart believes M&A activity could reach a new peak in mid-to-late 2021. The last three years have demonstrated that there’s still plenty of room for strategic acquisitions in behavioral health. Note: The sum of sub-industries (broken down above) does not always equal total sector deal volume, as some transactions include more than one sub-industry. Addiction Treatment In Q4, the deal activity continued for several growing PE-backed portfolio companies. As they add new locations, many are also launching rebranding efforts to unite their networks in name as well as in operations. A recent survey from the National Association of Addiction Treatment Providers noted that providers are making significant investments in technology, which will likely set them up for more objective quality-of-care measurement, which also leads to improved reimbursement from payers. “Buyers are definitely not looking to add scale for the sake of scale,” said Taggart. “Proven clinical quality and the ability to increase census has to be part of the growth strategy.” It was a busy quarter for BayMark Health Services with a number of significant deals. The addiction treatment organization acquired Liberty Bay Recovery Center , a residential treatment center in Portland, Maine, making it the second residential offering in the BayMark network of more than 250 facilities across the United States and Canada. Mertz Taggart represented Liberty Bay in the transaction . BayMark also announced the acquisition of Limestone Health , an opioid treatment program with three locations in Indiana, formerly owned by Springstone, Inc. The transaction represents BayMark’s first entry into the state. In December, it acquired Choices of Louisiana , which offers opioid treatment programs in three locations, and additionally in a separate transaction, it added Recovery Pathways , an office-based opioid treatment provider with three locations in Pennsylvania, to its roster. Also in December, BayMark acquired Echo Treatment Center in Pennsylvania, which will fall under the MedMark Treatment Centers brand. BayMark is a portfolio company of Webster Equity Partners. Summit BHC has acquired Seabrook in New Jersey, adding a 153-bed inpatient center and three outpatient centers to its portfolio. The deal marks Summit’s first entry into New Jersey and brings the company’s total number of locations to 22. Mertz Taggart provided sell-side services for Seabrook in the transaction. Landmark Recovery acquired Las Vegas Recovery Centers in December . Mertz Taggart provided sell-side services for Las Vegas Recovery Centers in the transaction. Landmark now operates in four states and plans to open 10 new locations in 2021. Arisa Health announced the acquisition of the Wilbur D. Mills Treatment Center in Arkansas, which includes a residential and outpatient center as well as an apartment complex for those in recovery. It will be rebranded as Arisa Health Recovery at Mills. Behavioral Health Group announced several deals in Q4. It expanded into Rhode Island with the acquisition of the Center for Treatment & Recovery, LLC , which will be rebranded as BHG Pawtucket Treatment Center. It also announced it had expanded its footprint in Alabama with the acquisition of Huntsville Recovery, Inc. and Stevenson Recovery, Inc. in October. The two locations will be rebranded with the BHG name. In November, BHG acquired Wellness Ambulatory Care in Tennessee. In all, the company operates across 15 states. Discovery Behavioral Health acquired Prosperity Wellness Center , a 40-bed residential treatment center in Washington, representing the 10th brand added to the Discovery portfolio. The organization operates four existing outpatient centers in the state as well. Center For Discovery and Cliffside Malibu merged in 2018 to form Discovery Behavioral Health as a newly created parent company, backed by Webster Equity Partners . Autism Services & Intellectual/Developmental Disabilities Individuals with autism spectrum disorder and intellectual/developmental disabilities were among those experiencing added distress in 2020 attributed to reduced access to services because of the pandemic, according to a report from the National Institutes of Health. As a result, more individuals will likely need a higher level of care in 2021, including involvement from family and loved ones. “Care that extends to the family will be a sought-after service offering,” Taggart says. “We should expect to see buyers looking for acquisitions to enhance comprehensive services and whole-person care.” SPG in October announced two deals. It acquired applied behavioral analysis (ABA) provider Family Support Center as well as Go2Consult , a speech and language services provider. The transactions broaden the geographic coverage for SPG, a portfolio company of Ridgemont Equity Partners . Blue Sprig Pediatrics, Inc. announced a deal to acquire the assets of the Michigan-based Momentum Autism Therapy Services , a center- and home-based provider of ABA services. Pharos Capital Group, LLC in December acquired Catalyst Behavioral Solutions , a Utah-based mental and behavioral health services provider, marking its seventh acquisition. Catalyst offers Catalyst Academy, a program for children. In a platform deal , New Capital Partners and OSF Ventures , part of the OSF Health System, acquired DotCom Therapy, Inc , provider of virtual counseling and therapy for autism spectrum disorder. Caravel Autism Health announced the acquisition of Behavior Therapy Solutions of Minnesota . The combined organization will serve children with autism and their families through a network of six autism therapy centers in the state. Apara Autism Centers in December acquired Behavior Pioneers , a provider of ABA services with four locations in Texas. Mental Health Even now, providers are still wrestling with parity issues, Taggart said. Therefore, mental health organizations that have beneficial in-network contracts with payers will be attractive to strategic buyers. And consolidation will help providers gain the scale they need to bring much-needed leverage to the negotiating table. And any organization that can demonstrate comparable quality of care and reasonable profitability through the use of virtual appointments will be an attractive target. Pathways Health and Community Support, LLC completed the acqu here isition of Access Family Services, Family Behavioral Resources , and Autism Education and Research Institute —three intervention service organizations which will be combined into one entity. Pathways operates in 18 states and the District of Columbia. Previously, Atar Capital acquired Pathways from Molina Healthcare in 2018. Monte Nido & Affiliates , a portfolio company of Levine Leichtman Capital Partners , acquired Rosewood Ranch, L.P. , a network of three eating disorder treatment facilities in Arizona. With the transaction, Monte Nido now operates 29 residential and outpatient facilities in 11 states. The Stepping Stones Group , announced the acquisition of Ardor School Solutions , a provider of school-based therapeutic and behavioral health services. Stepping Stones is a portfolio company of Five Arrows Capital Partners . The deal expands the organization’s geographic footprint into New Mexico and Arizona. ProtoCall Services , a 24/7 telephonic crisis intervention provider acquired The Shrink Space , a referral management software platform that is used in higher education with a national network of more than 4,000 licensed clinicians, prescribers and treatment centers. Private equity firm Kelso has acquired a majority interest in Refresh Mental Health , an outpatient mental health network with 200 locations nationwide. Kelso’s stake in Refresh was acquired from affiliates of investment firm Lindsay Goldberg, which helped found Refresh in 2017. Locations acquired in this platform deal include outpatient substance use disorder, eating disorder and mental health treatment centers. Summit Behavioral Healthcare LLC purchased the shuttered 92-bed Clear View Behavioral Center in Colorado for $29.2 million in a deal that closed in December. Summit intends to apply for a new license and begin operations within the first six months of 2021. In a platform deal, Revelstoke Capital Partners acquired Family Care Center , which provides outpatient psychiatry services to the U.S. Armed Forces and veterans in Colorado. The organization plans to expand services in the state and in new geographic areas. Latticework Capital Management in December acquired Beacon Behavioral Hospital, which operates seven intensive outpatient locations and four inpatient hospitals in Louisiana. Now with this platform deal, leaders plan to expand into new states and add new service offerings. Magellan Health, Inc. in December completed a transaction to acquire a 70% interest in Bayless Integrated Healthcare , an outpatient behavioral health and primary care provider in Arizona. Magellan’s core competency has been in managed care, however, the organization has the option to buy the remaining equity in Bayless within the next 36 months. Bayless brings additional integrated health, telehealth and other provider capabilities to the Magellan portfolio. View the Q3 2020 Behavioral Health Report . Trackbacks/Pingbacks Behavioral Health M&A Report: Q1 2021 – Mertz Taggart - […] a busy quarter to close out 2020, BayMark Health Services stayed busy in the new year, announcing the acquisition of Partners in […]