Home health and hospice deals climbed this spring while home care sales remained steady, according to a quarterly review of mergers and acquisitions by Mertz-Taggart.
There were 10 home health transactions in the quarter, compared to six in the first three months of the year. It remains to be seen how payment cuts expected to be finalized in November will impact sales in the second half of 2024.
“Industry stakeholders are justifiably up in arms over the proposed cut, which includes another ~4% permanent cut,” says Cory Mertz, managing partner at Mertz Taggart. “From an M&A perspective, it’s another step toward certainty, which helps unlock transactions.”
There were nine hospice transactions in the second quarter, an increase from four in the first three months of the year.
"It's one quarter worth of data, but it's encouraging to see," Mertz said. "We talk with buyers and private equity regularly. The general opinion is that we saw the bottom in healthcare services M&A transactions in Q1. We'll be monitoring the inflation numbers and the Fed's comments over the next few months."