Home Health M&A Slows at Start of 2017

Despite a rising interest in the home care space from outside financing groups, mergers and acquisition activity slowed during the first three months of the year.

In the first quarter of 2017, there were just 13 publicly announced home health and hospice acquisitions, according to recent data from Irving Levin and Associates. M&A remained flat from the end of 2016, with 12 public acquisitions in the fourth quarter of the year.

However, compared to the 27 deals announced at the start of 2016, acquisitions were down 38% in the first quarter of 2017, according to the data.

Jordan Health Services was the most active buyer in the first three months of 2017, Irving Levin found, with the majority of deals overall being small. Only one publicly announced deal had a disclosed price in the first quarter, and it was less than $1 million.

The data comes as private equity investments in the space reached a new high in 2016, according to data from The Braff Group. Three of the deals in the first quarter of 2017 were with private equity firms, according to Irving Levin. Three deals were conducted by hospital or health systems.

Despite the slowdown in deals, home health valuations still posted the highest trading multiples of all health care sectors last year.

“Even though there has been an increased focus on increasing home and community-based supports and services, buyers remain concerned about changes in payment methodology,” Lisa Phillips, editor of The Health Care M&A report, which published the data, said in a statement. “Everyone know that the home health and hospice business will grow. The problem is figuring out how to pay for it.”

Written by Amy Baxter

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Amy Baxter
Assistant Editor at Home Health Care News
When not writing about all things home health, Amy fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."