Home-based care M&A volume took a dip in Q3 2025. The decline stemmed from a reduction in non-medical home care deals, according to the latest report from M&A advisory firm Mertz Taggart.

With a total of 20 transactions overall, the report found that dealmaking activity in home health, home care and hospice subsided compared to Q1 and Q2 2025. However, Q3 2025 M&A volume falls in line with what took place in 2024.

Currently, the home health segment is viewed as the riskier bet, due to the major cuts proposed in the 2026 payment rule.

The proposal calls for a 6.4% aggregate cut to home health payments, an estimated $1.135 billion decrease compared to 2025. Despite this uncertainty, there’s still interest in the space.

“Although buyers are well-aware of the risks involved with a potentially large reimbursement cut, high-quality assets are still in strong demand,” Cory Mertz, managing partner at Mertz Taggart, said in the report. “Of the major home-based care providers who are building a continuum of care in their efforts to negotiate value-based payment arrangements with the payors, skilled home health is the most prominent of the service lines.”

Seven home health transactions occurred in the third quarter of 2025, the same volume as the previous quarter.

Typically a prolific acquirer, The Pennant Group (Nasdaq: PNTG) remained active this quarter. The company was responsible for two of the seven transactions, acquiring both GrandCare Health Services and Healing Hearts Home Health.

In the past, Pennant’s acquisition strategy has been to buy community-driven home-based care assets with strong ties to their specific markets.

The report also highlighted UnitedHealth Group’s (NYSE: UNH) acquisition of Amedisys (Nasdaq: AMED), a major deal in Q3 that closed after several roadblocks.

On the non-medical home care side, there was a slight decline in dealmaking activity after increases in Q1 and Q2. In total, 11 transactions took place in Q3 2025.

One of the most significant home care deals in Q3 was Addus HomeCare Corporation’s (Nasdaq: ADUS) purchase of Pennsylvania-based Helping Hands Home for $21.2 million. Overall, the personal care segment accounts for 76.5% of Addus’ business.

Looking ahead, Mertz said he believes that non-medical home care will continue to garner interest from buyers.

“We’re still seeing high levels of interest in the home care space, driven primarily by sponsor-backed portfolio companies that are seeking additional cash flow before their scheduled exits in the next 12-18 months,” he said. “We are also seeing an uptick in demand for private duty home care, as some of the strategic acquirers are looking to diversify their payor mix.”