Home Health And Hospice M&A Activity Slumped In Q3: 2016, according to data from Irving Levin Associates, Inc.

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Home health and hospice acquisitions slumped to their lowest level of activity for the year in the third quarter of 2016, according to data from Irving Levin Associates, Inc.

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M&A activity slumped in the third quarter of 2016 to just 10 announced transactions

After a boost in M&A activity in the first quarter of 2016, home health and hospice M&A activity slumped in the third quarter of 2016 to just 10 announced transactions, according to new acquisition data from Irving Levin Associates. This represented a 52% decline from the first quarter’s 21 home health and hospice acquisitions, but a smaller 17% drop from the 12 announced acquisitions in the second quarter. The third quarter also had the lowest level of activity since the second quarter of 2015 when there were just six acquisitions. Most quarters have averaged between 12 and 13 acquisitions recently, so the first quarter was a bit of an anomaly, and the third quarter’s low M&A activity may be reflecting concerns about reimbursement and the pressure on labor costs. Private equity companies, however, are still investing in the space, and despite short-term economic uncertainties, most indicators point to an expanding use of home health and hospice services, which bodes well for M&A activity. The dollars spent on home health and hospice mergers and acquisitions where the price was disclosed remained consistent with the second quarter’s activity at $422 million, but because most acquisitions are quite small, very few transactions have disclosed prices.

The largest transaction with a disclosed price in the third quarter of 2016 was private equity firm Frazier Healthcare Partners’ $418 million purchase of a 60% stake in Matrix Medical Network, which was owned by Providence Service Corporation. Matrix provides in-home assessments and care management services for health plan members. Providence acquired Matrix in October 2014 for $393 million. Amedisys announced a $4.4 million acquisition of Massachusetts-based Professional Profiles, a full-service private home care agency with three branch offices. “After the close of the third quarter, Almost Family announced an acquisition of an 80% interest in the home health business of hospital company Community Health Systems for $128 million. This could jump-start renewed M&A activity in the home health and hospice space, including partnerships and joint ventures,” stated Lisa Phillips, Editor of the Health Care M&A Report.

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the Health Care M&A Information Source. For information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters, and maintains databases on the healthcare and senior housing markets.

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Rachel Scinto
Irving Levin Associates
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