Home Health Acquisition Prices Spike to Start 2016

The amount of money being put toward acquiring home health and hospice companies is increasing, according to the latest figures from Irving Levin Associates, Inc.’s ‘Health Care M&A Report.’

Specifically, the dollars spent on home health and hospice mergers and acquisitions in the first quarter of 2016—in cases where the price was disclosed—rose 69% from the fourth quarter of 2015 to $183.5 million, according to the latest figures from Irving Levin Associate’s “Health Care M&A Report.” That’s a 32% increase when compared to the dollars spent in the first quarter of 2015.

Still, the majority of home health and hospice transactions are small, and many of them involve prices that are undisclosed, Irving Levin Associates said in a press release.

The top deal driving the quarterly price increase involved one of the nation’s largest post-acute providers divesting its home health business, while two of the major publicly traded home health providers executed other high-value transactions.

The biggest transaction with a disclosed price during the first quarter of 2016 was Compassus’ $84 million purchase of Genesis Healthcare’s (NYSE: GEN) home health business. The next biggest acquisitions were a $37 million purchase by Almost Family (Nasdaq: AFAM), a $28 million purchase by Amedysis (Nasdaq: AMED), and $18 million purchase by Kindred Healthcare (NYSE: KND), which announced three separate home health and hospice acquisitions last quarter.

“Post-acute providers continue to seek home health and hospice businesses to round out their networks in local markets, and the large, publicly traded home health and hospice providers remain active in the market,” Lisa Phillips, editor of the Health Care M&A Report, said in a prepared statement.

The overall number of home health and hospice transactions rose in the first quarter of 2016 to 18, a 50% increase over the 12 transactions recorded in the fourth quarter of 2015, according to figures from the Health Care M&A Report.

Written by Mary Kate Nelson