Home care mergers and acquisitions activity seems to be picking up again after a lackluster first quarter. Well, surging might be a better word.
The first quarter only saw 23 combined transactions across home care, home health and hospice pale. This total pales in comparison to the 52 deals a quarter prior (2020 fourth quarter), but it appears to be more of a blip than a trend, according to advisory firm Mertz Taggart, which recently released its first-quarter report on mergers and acquisitions (M&A).
“Dealmaking activity was down in the first quarter, but much of that can be attributed to potential buyers finalizing the several deals executed in the second half — especially in the last quarter — of 2020,” Mertz Taggart Managing Partner Cory Mertz said in a release. “We’re headed toward a record high for M&A activity, with robust interest from strategics and private equity buyers alike, across all in-home care areas.”
Judging from the last few days, the report was prescient. Several transactions already have transpired. Among those big and small:
- BrightSpring Health Services of Louisville, KY, completed the purchase of Abode Healthcare, which provides home health and hospice care in 12 states through 41 branches. BrightSpring now spans 17 states.
- Always Compassionate Home Care of Melville, NY, disclosed it bought Wellness Home Care of Goshen, New York, at the end of 2020.
- On Thursday, Caring People, of West Palm Beach, FL, said it has taken over Halcyon Elder Care, a New Jersey-based private pay care management and home services company. And that is expected to be “the first of many slated for 2021,” the company said.
Then, of course, there was Pharos Capital, which has been adding home health and hospice assets. And in March, LHC Group Inc. and Orlando Health expanded their Florida partnership.
Let the M&A games begin.
The home care industry may look a bit different at the end of this year. It currently has a unique profile, composed of a lot of small mom-and-shops as well as regional players. As Mertz Taggart suggests, the impact of the pandemic and new Patient-Driven Grouping Model (PDGM) payment system may be forcing some wind shifts that will significantly change the landscape.
For those who need or want to make a move, it may be the right time to take those ideas out for a spin.
Liza Berger is editor of McKnight’s Home Care. Email her at [email protected] and follow her @LizaBerger19.
