The Most Intriguing Home-Based Care Deals of 2023

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Home-based care dealmaking trends generally give a good idea of what’s going on in the space at large.

They show you where the money is headed, and where it’s not. They show you where the Centers for Medicare & Medicaid Services’ (CMS) stroke of the pen has impacted investment or transaction activity. The trends show you who’s hot in the home-based care space, and who’s not.

Therefore, close attention has been paid to the transaction dip in home care, home health and hospice this year. But, in the meantime, it’s possible that we’ve all been missing the forest for the trees.


While home-based care deals are down through the first half of 2023 (though slightly up in Q2), so are health care deals generally. In fact, transaction activity is down at a national level, across industries.

Interest rate increases, staffing shortages and even the Ukraine war have played a hand in a slower dealmaking year in home-based care. Those factors have also led to a 38% decrease in M&A activity globally, however, according to data from Refinitiv.

“It’s not even just health care,” Dexter Braff, the president of the M&A firm The Braff Group, told me. “If you look at different deal flows from the broader M&A market, you would see almost a mirror image of what we’re seeing in health care. This is being felt across the global mergers and acquisitions environment – in geography, and then across industries as well.”


If we can accept the premise that deal flow is largely being dictated by forces outside of home-based care companies’ control, we can enter a much more interesting conversation.

Of the deals that are getting done in home-based care, which are the most interesting – and why?

Finding the broader stories behind the most intriguing home-based care transactions thus far in 2023 is the goal of today’s exclusive, members-only HHCN+ Update.

Home-based care deal trends

The Federal Reserve announced this week that it would raise the interest rate by another quarter point, hiking it to 5.5%, the highest it has been in decades. It’s doing so to combat inflation, which has finally slowed of late.

For now, that still makes for a tough operating environment for potential buyers in the home-based care space, like private equity firms.

PE firms pulling back is due to the aforementioned factors impacting M&A as a whole. Therefore, health care services deal numbers mirror home health and hospice deal numbers.

“I think [those interest rates] are keeping buyers skittish, and they’re not quite ready to jump in feet first,” Braff said. “And the health care market is so tied in with private equity – we see that private equity across all of the health care services that we cover accounts for a little bit more than 50% of deal flow.”

But those PE firms eventually have to spend the cash they have on hand. That’s why Braff is bullish that dealmaking could tick up in the near-term future, despite any internal factors at play in home care, home health or hospice.

“They have to spend money; they can’t just sit on their cash for long periods of time,” Braff said. “They will come back, if for no other reason than that they have to deploy their money. That would suggest to us that, sometime in 2024 – maybe it’s not the first quarter, maybe it’s the second quarter – we will almost assuredly see a ramp up. We’ll also see, particularly in the home health arena, rates settled.”

The most intriguing deals

Addus HomeCare Corporation (Nasdaq: ADUS) is a self-proclaimed conservative buyer.

Its leaders have reiterated over the last couple of years, however, that it plans to increase its value-based capabilities by layering home health services on top of personal care services in its biggest markets.

It did just that in the second quarter with the acquisition of Tennessee Quality Care in a $106 million deal.

Addus already has eight locations of its own in Tennessee, and will now be adding Tennessee Quality Care’s 17 locations and 1,800 daily patients to its portfolio. While Tennessee appears to be a sizable, quality home health care provider – an increasingly rare find – it also operates in a certificate-of-need (CON) state.

Through the acquisition, Addus has accomplished its stated goal in another state.

While CMS proposals in both home health and personal care threaten to damage the company’s business, it is setting itself up to be a future-facing, value-based player.

Earlier in the year, another home health care provider – Amedisys Inc. (Nasdaq AMED) – honed in on its core service lines by offloading its personal care business to the Massachusetts-based HouseWorks.

Backed by InTandem Capital, HouseWorks is a mostly regional home care provider with optimistic growth plans for the future. In the Amedisys deal, it took over 13 care centers.

While the home care industry is incredibly fragmented, most of the largest providers are franchises. HouseWorks is not.

In Braff’s opinion, its deal with Amedisys is one of the most interesting of the year thus far.

“There has been a fair amount of private-duty transactions, but not of that scope,” he said. “That’s significant in terms of the confidence [InTandem] had in the private-duty market. But also, HouseWorks had more of a private-pay focus, but with the Amedisys acquisition, they’re now significantly in Medicaid as well.”

HouseWorks CEO Mike Trigilio also drew excitement from that payer diversification opportunity after the deal.

“Now there’s going to be data connectivity through such a large employee base that’s going to be consistent,” he told me in February. “In Massachusetts, there are roughly 35 different types of payer contracts that are signed between Associated Home Care (AHC) and HouseWorks. Imagine a world where you have 4,000 to 5,000 caregivers delivering the same care, on the same platform, to all of those payers. There’s a great value in that data that we’re able to give to them.”

Amedisys – unbeknownst to most at the time – was also on the verge of selling its entire business. Originally, Option Care Health (Nasdaq: OPCH) entered into an agreement to acquire the company. Then, UnitedHealth Group’s (NYSE: UNH) Optum swooped in and won out on the bidding process.

That deal has been covered extensively, as Optum also completed its acquisition of the home health giant LHC Group earlier this year.

What I was more curious about – which hasn’t been explored yet – is what effect Optum’s entrance could have on the broader home-based care M&A market.

“If one or two PE firms jumped into a market that nobody else has jumped into in any significant way, the follow-the-leader activity is typically extraordinary,” Braff said. “With UnitedHealth Group, they’re such a unique and strategic buyer that something that they do would not, in my mind, change behavior.”

The first half of 2023 also brought us CenterWell Home Health’s first major transaction since the dust settled on its rebranding. A part of Humana Inc. (NYSE: HUM), CenterWell Home Health is made up of the assets of what was formerly Kindred at Home.

Specifically, CenterWell Home Health bolstered its footprint in a very crowded and competitive Florida market through the acquisition of Trilogy Home Health. Based in West Palm Beach, Trilogy has 11 locations across Florida and offers home health, home care and care management services.

It had been unclear how aggressive Humana and CenterWell would be acquisitively. But the Trilogy deal was a sizable one, and a sign that if there’s a good target out there, they’re willing to strike.

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