Home Health M&A Takes Quarterly Hit to Start 2014

Home health and hospice M&A activity took a hit in the first quarter of 2014, dropping 40% from the previous quarter, according to an Irving Levin report on M&A in the health care industry. 

The sector’s six deals marks a decline from 10 in the fourth quarter of 2013, along with a 33.3% decrease from one year prior. 

Deal volume for the nine health care services sectors tracked in The Health Care M&A Report, released in April, declined 8.1% overall on a quarterly basis but increased by 3.8% from 2013’s first quarter. In dollar volume, health care services logged $12.4 billion of deals, down 28% from the fourth quarter’s $17.3 billion but more than doubling last year’s $5.6 billion. 

Including the four health care technology sectors, transactions dropped 14% from the fourth quarter of 2013, but rose 12.7% from one year prior. 


Four other health care services sectors saw their deal volume decrease on a quarterly basis: hospitals, long-term care, physician medical groups, and rehabilitation.

However, the 60 long-term care deals in the first quarter of 2014 represents a 36.4% increase from one year ago, when there were 44 transactions.

On an annual basis, transaction volume declined for three sectors in addition to home health & hospice—behavioral health care, hospitals, and physician medical groups—and remained flat for a fifth sector, rehabilitation. On the other side of the spectrum, managed care logged a 150% volume increase from two deals last year to five.


“Health care merger and acquisition activity has recovered from the lull it saw in the first quarter of 2013. The equity markets are performing even stronger than last year, and the implementation of the Affordable Care Act didn’t slow deal-making in some sectors,” said Lisa E. Phillips, editor of The Health Care M&A Report, in a statement. “With that uncertainty gone, we expect to see a couple of busy quarters ahead.”

Written by Alyssa Gerace