After a slow third quarter, with just four transactions, home health agency transactions finished the year strong with 13 deals in Q4, according to M&A firm Mertz Taggart.
 
Across home health, hospice and home care, there were 25 transactions, in line with pre-pandemic norms of 25-30 deals per quarter, Cory Mertz noted in a blog post.
 
“We are seeing signs of a thaw in dealmaking,” he says. “But the first and second quarter of 2024 will be better indicators.”
 
Many of the deals in Q4 were driven by private equity: 18 of the 25 transactions either involved a PE buyer or a PE-backed portfolio company, Mertz notes.
 
“Eventually, PE-driven activity will normalize across industries,” he says. “Considering how in-demand quality home-based care agencies remain, the home-based care industry at large is primed to be a beneficiary of that normalization.”
 
Prospective sellers can perform some level of clinical and compliance audit along with some level of a quality of earnings (QoE) prior to going to market to help mitigate deal risk for the buyers and make the deal a little easier to close, Mertz notes.