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Home Health M&A Deals Are Off to a Slow Start for 2017

Posted on Monday, April 17, 2017 9:19 PM

Although private equity investment hit an all-time high for home health and hospice in 2016, mergers and acquisitions (M&A) decreased for the first three months of 2017.

According to the data from Irving Levin and Associates, in the first quarter of 2017, there were just 13 publicly announced home health and hospice acquisitions. At the end of 2016, M&A had 12 public acquisitions in the fourth quarter of the year.

The data also shows that in comparison to the 27 deals announced at the start of 2016, acquisitions were down 38% in the first quarter of 2017.

Irving Levin found that Jordan Health Services was the most active buyer in the first three months of 2017, even though a majority of their deals were small.

The data results confirm that private equity investments reached a new high in 2016, according to data from The Braff Group. Additionally, the report concludes that three of the deals in the first quarter of 2017 were with private equity firms.

Despite the activity in deals, home health valuations decided to post the highest trading multiples of all health care sectors from 2016.

“Even though there has been an increased focus on increasing home and community-based supports and services, buyers remain concerned about changes in payment methodology,” Lisa Phillips, editor of The Health Care M&A report, which published the data, said in a statement. “Everyone know that the home health and hospice business will grow. The problem is figuring out how to pay for it.”

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