Home Health, Hospice M&A Spikes at Start of 2018

The home health sector is on a hot streak. In the first quarter of 2018 there were 21 publicly announced transactions in the space, according to data from Irving Levin Associates as reported by HealthCareMandA.com.

The number of transactions was 67% higher than the 14 deals seen in the fourth quarter of 2017, and signals a turnaround from the previous three quarters. However, year over year, the transaction volume is only 5% higher.

The spike in transactions comes after 2017 closed the door on some regulatory headwinds that had threatened to cut nearly $950 million from the home health care payment system. The industry is still facing payment system reforms in the coming years, however.


The end of 2017 was marked by several mega-deals, including the merger to two of the largest home health care providers, LHC Group (Nasdaq: LHCG) and Almost Family (Nasdaq: AFAM). The merger was finalized at the end of March, and created the second largest home health care provider in the nation with a revenue rate of just under $2 billion.

In addition, insurance giant Humana (NYSE: HUM) announced it was acquiring the home health and hospice operations of Kindred Healthcare (NYSE: KND) during the final quarter of 2017. That transaction is expected to close in summer 2018.

In the first quarter of 2018, only one company publicly announced two transactions, according to Irving Levin Associates. Stonehenge Partners, a private equity firm based in Ohio, acquired two hospice agencies—Capital City Hospice in Columbus and Queen City Hospice in Cincinnati—for undisclosed amounts.


Private groups made up the majority of deals in the first quarter—62%, according to the data.

“Most transactions in the home health and hospice space are small, and typically do not come with disclosed prices,” Lisa Phillips, editor of The Health Care M&A Report, which publishes the data, said in a statement. “The number of transactions in the first quarter was the highest since the fourth quarter of 2016 (24 acquisitions), and it may be a sign that investment interest has returned after some regulatory headwinds diminished in the fourth quarter,” Phillips stated.

Addus HomeCare (Nasdaq: ADUS), a personal care services provider based in Frisco, Texas, made the largest acquisition of the quarter, with a $40 million purchase of Ambercare Corporation, a New Mexico-based provider of personal care, hospice and home health care services with $57 million in revenues.

Written by Amy Baxter

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