Home Health Transaction Numbers Continue to Climb
Last fall, the home health M&A winds started to shift, with some industry insiders even predicting a record number of transactions to soon follow.
New data suggests that point has arrived.
Most had gone into 2020 believing that the Patient-Driven Groupings Model (PDGM) would jump start a period of “historic” M&A activity, but that ultimately didn’t play out. In fact, early on in the year, dealmaking largely froze due to coronavirus-related operational uncertainty.
In the fourth quarter of 2020, however, there were at least 17 home health care-related transactions, according to a new report from M&A advisory firm Mertz Taggart. That was the same number of transactions as the third and second quarters combined — and more transactions than any individual quarter since the 18 in Q3 2018.
“My crystal ball is clouded somewhat, with an election less than a month away and a threat of another significant COVID outbreak,” Mertz Taggart Managing Partner Cory Mertz . “But I’m going to go out on a limb and speculate we will see near-record — if not record — home health M&A activity between Q4 2020 and Q1 2021.”
In its M&A report, Mertz Taggart explains there has been plenty of pent-up demand for home health assets, particularly as payers and health systems look to shift care away from institutional settings.
Across the home health, hospice and home care landscapes, there were at least 51 transactions in Q4 2020. While home health dealmaking was way up, hospice transactions still dominated the headlines.
At least 25 hospice transactions occurred during the fourth quarter, exceeding the 19 reported deals in Q3. At least 15 hospice deals have taken place per quarter since the end of 2019, according to Mertz Taggart.
“Deal volume started to recover or trend upward across the home health, home care and hospice markets toward the middle of 2020,” Mertz noted in his firm’s report. “It seems like every quarter we’re saying demand for hospice is at an all-time high — and then we see even more demand materialize.”
So far, there are no signs of home health dealmaking slowing down in 2021.
Earlier this week, Eagle, Idaho-based The Pennant Group (Nasdaq: PNTG) announced it acquired Sacred Heart Home Health Care, which provides home health services in Phoenix and Tucson, Arizona.
Additionally, College Station, Texas-based Traditions Health announced toward the start of the month that : Traditions Home Care and Secure Home Care.
“This announcement is a fitting way to cap off what’s been an exciting year for Traditions Health,” President and CEO Bryan Wolfe said in a press release announcing the news.
Also in January, Chicago-based Help at Home reportedly acquired The Adaptive Group, a home health, hospice and home care services provider that operates across Indiana.
Besides shaping up to be a record year for sheer volume, 2021 also has the potential to be a very interesting year in terms of individual deal size.
Encompass Health Corp. (NYSE: EHC) has confirmed that it’s for its home health and hospice segment, with Brookdale Senior Living Inc. (NYSE: BKD) .
The post appeared first on .