The deal activity of Home Health & Hospice investors has been on a steady decline over the past two years, ever since reaching its peak in the fourth quarter of 2021. There were 95 reported transactions in the 2023 Home Health & Hospice market, which is a 16% decrease from 2022 when there were 113 deals announced.

The sector was impacted by a number of headwinds, such as low wages, rising cost of delivering care, staffing challenges and a fear of violence among home care aides, nurses and therapists. For 2024, home care leaders are looking toward AI, alternative payer sources, employee-centric solutions and much more so they can provide an integrated and individualized care plan to patients.

The 2023 Home Health & Hospice leaders

The most active Home Health & Hospice investor during 2023 was The Pennant Group, which completed the year with five deal announcements across the home hospice, home health and multi-service specialties. The company made acquisitions in Arizona, Idaho, Oklahoma, Texas and Colorado.

The Pennant Group anticipates better-than-expected fourth-quarter 2023 revenues and earnings per share following the announcement of a home health joint venture with a well-known non-profit integrated health system, John Muir Health. The company has announced 10 deals since January 2021 and has consistently been one of the top acquirers in the space. Most of HH&H investors in the industry are private equity (PE)-backed, but The Pennant Group is unique in being one of the biggest publicly traded players in the industry without a PE backer.

Help At Home was also active during the year, with three acquisitions announced across four states. The company kicked off 2023 with the purchase of Pennsylvania-based Open Systems Healthcare in January, then followed that up with the acquisition of Georgia-based Prosper Home Care in March. A few months later, in August 2023, the company announced the purchase of two home health providers: Ohio-based Berkshire Homecare and Indiana-based My Care at Home.

Help at Home is a leading national provider of in-home care services, delivering relationship-based personal care and other services to help seniors and the disabled remain in their homes, the preferred setting of care. As of June 2023, Help at Home operated more than 180 branch locations across 12 states and provided in-home personal care and other home-based services to more than 66,000 clients with the help of 53,000 caregivers. The company is backed by Centerbridge Partners and The Vistria Group. PE groups and/or their portfolio companies were involved in 40 HH&H deals during 2023, making up 42% of all HH&H deals, compared to 43% in 2022. 

Tied with Help At Home as the second most active acquirer of 2023, HouseWorks, which is also PE-backed, announced three deals during 2023. After being acquired by InTandem Capital Partners in January 2023, the company bought the personal care division at Amedisys in February, Pennsylvania-based Care and Help Home Care in May and New York-based Elite Home Health Care in December. 

Founded in 1998, HouseWorks provides in-home care services in the greater Boston, New York City, Philadelphia and southern Maine markets. Along with traditional home care services, HouseWorks helps clients with certain home modification needs. HouseWorks received a strategic equity investment from New York-based PE firm InTandem Capital Partners in January 2023. HouseWorks has announced six transactions since November 2021.

Another PE-backed acquirer in the HH&H space was PurposeCare, which announced two deals during 2024. PurposeCare bought Michigan-based Home Sweet Home In-Home Care in March, followed by three Midwestern home-based care agencies (Scott’s Home Healthcare and Attentive Personal Care in Indiana and Choice Nursing Care & Home Health in Ohio). Already for 2024, the company has announced three home health acquisitions in Illinois, Michigan, Indiana and Ohio.

Established in December 2021, PurposeCare provides home-based care to more than 3,000 clients each month. PurposeCare is a portfolio company of Lorient Capital, a private investment firm focused exclusively on the healthcare industry. Since its founding, the company has made six acquisition announcements, mostly in the home health specialty. Midwestern companies made up approximately 18% of all HH&H companies acquired during 2023. This compares to 2022, when 27% of Home Health & Hospice targets were located in a Midwestern state.

Reliable Medical Supply was the most active acquirer in the durable medical equipment/respiratory home care (DME/RHC) space, with two transactions. The company announced the acquisitions of Capstone Medical Partners and Tusk Mobility in April 2023. Reliable Medical Supply, a portfolio company of Seven Hills Capital, provides complex rehab technology, clinical respiratory products, durable medical equipment and supplies to serve a fragile patient base of pediatric and adult clients. The company has made five purchases since it was acquired by Seven Hills in November 2018.

The DME/RHC sector was the second most active vertical for 2023 Home Health & Hospice investors, with 20 deals announced in the space. While M&A activity in the Home Health & Hospice space as a whole has fallen in recent years, the DME/RHC sector has been on the rise, with a 12% increase in 2022, and a 5% increase in 2023.

Deal size headliners

Deal volume doesn’t tell the whole story of the 2023 Home Health & Hospice market. There were some major acquirers that made just one or two big dollar deal announcements throughout the year. Buyers like Optum, a part of UnitedHealth Group, made a splash with the largest Home Health & Hospice deal by disclosed price of the year in June 2023, at more than $3.7 billion. The company acquired Amedisys, formerly Analytical Nursing Management Corporation, one of the largest home health and hospice operators nationwide. Amedisys’ annual revenue for 2022 was $2.1 billion.

Initially, Option Care Health agreed to acquire the provider in the hopes that it could create an “end-to-end” continuum in the home. Ultimately, UnitedHealth Group’s Optum won out in the end, luring Amedisys away with an all-cash deal. If the deal closes, it will position UnitedHealth to become one of the largest home health and hospice operators in the United States with 15% of market share.

Optum also acquired Crystal Run Healthcare, a multi-specialty physician group with 390 providers across more than 30 New York locations, in April 2023. Already, the company is eyeing a new acquisition in 2024. Optum plans to acquire The Corvallis Clinic, an independent 11-clinic physician-owned system in the mid-Willamette Valley. Keep an eye out on LevinPro HC for when that deal is officially announced.

Addus HomeCare, which has historically been an active Home Health & Hospice acquirer, also made announced a singular, yet impactful deal during 2023. In June, the company acquired Tennessee Quality Care for $106 million. The Tennessee-based home health, hospice and private duty nursing provider covers more than half of that state’s 95 counties and is anticipated to generate nearly $40 million in annual revenue, Addus’ CEO Dirk Allison said in the original announcement. The transaction also brings Addus into its third state in which it offers all three levels of home care, along with New Mexico and Illinois.

A variety of active participants

There were some interesting investors in the Home Health & Hospice space, from long-term care companies to hospitals. National Church Residences, the largest not-for-profit provider of seniors housing in the country with 360 senior housing communities in 25 states, made one Home Health & Hospice acquisition. The company acquired At Your Door Visiting Healthcare Services, which provides primary care, in-home medical services to residents at senior living communities across Ohio. Other long-term care companies, including Lutheran Senior Services and Lowe’s Guardian Angel, also made acquisitions in the space. This is an uptick from 2021 and 2022, when no such deals were announced.

There was only one hospital that showed interest in the Home Health & Hospice space. Intermountain Healthcare is a Utah-based, not-for-profit system of 33 hospitals, a medical group with more than 5,000 physicians and advanced practice clinicians at about 385 clinics, a health plans division called SelectHealth and other health services. The health system picked up Advent Home Health, a home health agency serving patients in the Greater Las Vegas area. Hospitals have historically shown very little interest in the Home Health & Hospice space. In 2022 and 2021, only two hospitals made acquisitions in this field, and interest further declined in 2023. The majority of acquirers in the Home Health & Hospice space are Home Health & Hospice companies themselves, with only 28% of acquirers coming from other industries.

Avery Swett is a writer for Levin Associates.

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