With the hospice mergers and acquisitions market showing no sign of slowing down, providers with high performance on quality measures, scale and size are anticipated to attract investors’ eyes. Even as strategic, private equity and non-traditional buyers continue to snap up hospices, those providers are themselves increasingly investing in more diversified assets, such as home health or personal care companies.
Hospice has been riding high in terms of investor interest and valuations, outpacing other health care sectors throughout the last several years running. The number of transactions involving a hospice or home health asset rose 16% during a 12-month period ending May 15, 2021, according to a report from PricewaterhouseCoopers (PwC). Of about 1,300 health care transactions during that period, 95 were hospice acquisitions. These deals collectively tipped past $11.8 billion, reaching record-high valuations as hospice and home health multiples reached 26.2x compared to 16.1x for the overall health care sector, according to PwC.
More non-traditional buyers are in the market for hospices such as search funds, family offices and special purpose acquisition companies (SPACs). Around 250 SPACs have formed in recent years.