Deal volume in the home health and hospice sector dipped slightly in the third quarter of 2019, down 23% with 20 publicly announced transactions, compared with 26 acquisitions in the second quarter, according to data from HealthCareMandA.com.
Compared with the third quarter of 2018, home health and hospice M&A activity decreased by 20%, when 25 acquisitions were announced. Six of the transactions disclosed prices in the third quarter of 2019, for a combined total of nearly $1.2 billion. In the same quarter of 2018, the total dollar value based on disclosed prices was just $7.2 million.
Of the 20 transactions announced in the third quarter, 35% were announced by private equity firms or their platform companies. An unusual pairing for this market involved a joint venture formed by TowerBrook Capital Partners, an investment management firm, and Ascension, the largest not-for-profit Catholic health system in the country. The organizations teamed up to acquire Hospice Compassus, a portfolio company of Formation Capital and Audax Private Equity, with operations in 25 states, for approximately $1 billion.
Two companies tied for the most transactions. Arosa+LivHome, a portfolio company of Bain Capital Double Impact, and LHC Group, Inc. (NASDAQ: LHCG) each announced three transactions. Addus HomeCare (NASDAQ: ADUS) and Nova Leap Health Corporation (TSXV: NLH) announced two transactions apiece.
Based on disclosed prices, spending in the quarter totaled $1.156 billion, with the Hospice Compassus deal accounting for the majority share. That total is 429% higher than the previous quarter’s $218 million.