Home-Based Care M&A Rebounds Significantly In Q2, Highlighted By Addus’ $106M Tennessee Quality Care Deal

Following a record-low start to 2023 and a relatively flat fourth quarter in 2022, home-based care M&A volume ticked up significantly in the second quarter this year.

Overall, the quarter saw at least 29 transactions across all home-based care sub-sectors, according to a recent report from M&A advisory firm Mertz Taggart.

All three sectors of home-based care — home health, home care and hospice — were all represented well in the quarter. According to the report, there were 16 home health, 11 home care and 13 hospice deals reported.


The 29 total transactions are up from 14 in Q1. That sum even edged out Q2 of 2022, which has 28 deals.

“This volume is in line with pre-pandemic norms,” Cory Mertz, managing partner with Mertz Taggart, said in a statement. “I’m going to be curious to see what next quarter brings but we are not ready to suggest it will be this strong. One quarter doesn’t make a trend, but it does signal a rebound in activity — which is positive.”

Source: Mertz Taggart

A significant deal that was not included in the report because it has a long way to go before being finalized was UnitedHealth Group’s (NYSE: UNH) Optum planned purchase of home health giant Amedisys Inc. (Nasdaq: AMED).


If the Optum and Amedisys deal is finalized, Mertz pointed out that Optum would own about 10% of the entire home health market.

One of the major transactions that is included in the report is Humana’s (NYSE: HUM) CenterWell Home Health and Trilogy Home Health deal.

The Trilogy acquisition will expand CenterWell Home Health’s density in Florida, a state it already has significant density.

Addus HomeCare Corporation (Nasdaq: ADUS) acquiring Tennessee Quality Care in a $106 million deal was also a quarter highlight that spanned across the home health, hospice and private-duty nursing sectors.

Despite some uncertainty that comes with the proposed payment rule from the U.S. Centers for Medicare & Medicaid Services (CMS), home health M&A hit its highest total since the fourth quarter of 2021.

Because any proposed cut would take effect in 2024, M&A experts believe that should pave the way for an active second half of 2023.

Source: Mertz Taggart

On the home care side, the Pennant Group’s (Nasdaq: PNTG) acquisition of Bluebird grabbed the top headlines of the quarter.

Earlier this month, the Idaho-based holding company acquired Bluebird Home Health, Bluebird Hospice and Bluebird Home Care — three agencies under the Bluebird brand.

Although volume for M&A is not expected to reach 2021 levels, demand for healthy, reliable and financially strong companies remains strong as ever.

“Demand remains historically high for cashflow-positive home-based care companies,” Mertz said. “That’s driven by scarcity of supply and insatiable private equity demand for add-on acquisitions, caused by a substantial decline in PE exits.”

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