Home Health M&A Remains Flat in Third Quarter

Publicly announced home health and hospice M&A activity held steady with fewer transactions than years past in the third quarter of 2017, after hitting a recent low last quarter.

The sector saw 10 transactions in the third quarter of 2017, representing no change from the second quarter, according to research conducted by Norwalk, Connecticut-based Irving Levin Associates. Only nine deals were logged in that quarter as of July 20. By comparison, there were 15 transactions in the first quarter of 2017.

Amedisys (Nasdaq: AMED), The Ensign Group (Nasdaq: ENSG) and HealthSouth’s (NYSE: HLS) Encompass Home Health and Hospice each announced one transaction during the quarter. Two private equity firms, Boyne Capital Partners and The Riverside Company, also made acquisitions in the third quarter of 2017.

While some experts have taken news of an overall industry slowdown with a grain of salt, there are fewer publicly announced deals this year than last. The third quarter of 2017’s volume was 17% below the number of deals in the third quarter of 2016, when 12 transactions were made public.

Regulations coming down the pike, including the proposed home health groupings model (HHGM) and an $80 million payment cut, may be having an influence on lower M&A activity.

“The good news is that deal volume was on par with the second quarter, and didn’t slip further,” said Lisa Phillips, editor of The Health Care M&A Report, which publishes the data, in a statement. “What happens on the regulatory side will determine this sector’s health in the coming year.”

Written by Tim Regan

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Tim Regan
Tim is a lover of bad jokes and good beer. When he's not hunched over his work computer, Tim can usually be found hunched over his personal computer.

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