The Home Health & Hospice sector is predicted to see a great deal more mergers and acquisitions in 2019 than it has in recent years. Bullish industry watchers cite the growing momentum behind value-based health care delivered in lower-cost settings as just one tailwind that is expected to boost the sector.
This sector closed out 2018 with 82 deals in our database, the best year for M&A since 2014, when 81 deals were made public.
Four deals are already on the books, all announced in the first week of the new year. Three are from private equity sponsors or their platform companies.
One deal echoed a growing trend of joint ventures between not-for-profit health systems and for-profit operators. Beaumont Health, an eight-hospital not-for-profit health system based in Southfield, Michigan, sold 90% of its home health and hospice business to Alternate Solutions Health Network for an undisclosed price.
Beaumont’s operations include certified nurses, nurse aides, physical and occupational therapists, speech pathologists, respiratory therapists, pharmacists and social workers. The buyer, based in Kettering, Ohio, collaborates with health systems in joint venture partnerships to assist in the post-acute care market with software solutions.
The new joint venture organization, Beaumont Home Health and Hospice, began operating on January 1. Beaumont cited the growing need for home health and hospice services in southeast Michigan as its reason to partner with the for-profit Alternate Solutions Health.
Bain Capital Double Impact (BCDI), the impact investing business of Bain Capital, was involved in two of the four acquisitions. One represented the first acquisition of its portfolio company Arosa+LivHome, which used to be two companies, Arosa in North Carolina and LivHome in Los Angeles.
BCDI acquired both and merged them in October 2018 to form a bi-coastal home health company. In January, the combined company bought Partners in Senior Care, a private home care services company that includes geriatric care management and wellness and financial planning for future care.
In the second deal, BCDI took over HealthDrive from Riverside Partners. The target provides on-site dentistry, optometry, podiatry and audiology services to residents in more than 2,000 skilled nursing and assisted living facilities across the country.
