Q1 2025 Home-Based Care M&A Report
- Emin Beganovic
- Apr 9
- 5 min read
Updated: 26 minutes ago
After reaching a nadir in 2024, the tides have turned in home-based care M&A. Whether the turnaround is a single wave or a full, long-term sea change remains to be seen.
A total of 29 home-based care transactions were reported in the first quarter of 2025, making it the most active quarter for the industry since 2023 and a return to pre-pandemic levels.
Home-Based Care M&A
While it's hard to predict whether deal volume will hold through year-end, Mertz Taggart Managing Partner Cory Mertz points to a key driver: aging private equity funds with significant dry powder. These funds are eager to deploy capital into both platform deals and bolt-on acquisitions for existing portfolio companies. “We’re starting to see some deals finally get across the finish line,” Mertz said.
“Several deals that were slated to close in 2024 were ultimately pushed into Q1 of 2025. Deals are just taking longer to get done. Buyers are hungry, but they remained very disciplined in their investment approach.”
Potential cuts to Medicaid will be a development to watch in the coming months. The Trump administration has signaled its desire to reduce federal costs via Medicaid spending, and the U.S. House recently passed a budget resolution targeting Medicaid cuts of up to $880 billion over the next decade. Detailed proposals for achieving the spending cuts are not yet under consideration in Congress.
This headline risk is enough to give many investors outside the industry pause on any platform opportunities, however existing industry buyers remain resolute in their approach, which culminated in a strong Q1 for Medicaid-funded personal care.
Home Health M&A
Eight transactions involving skilled home health providers were reported in Q1, up from the three announced in the prior quarter. Despite the ever-growing clawback risk from CMS’ perceived overpayments related to PDGM (currently at an estimated $4.5 billion), the uncertainty level is low enough for Medicare home health to continue to garner investment interest.
“I’d say home health demand is fairly strong right now,” Mertz commented. “On a scale of 1-10, demand is at about an 8, but buyers are laser focused on deals that move the needle strategically. The risk and uncertainty levels are relatively low, and it remains central to most strategic buyers’ value-based care strategies.”
The most notable home health transaction of Q1 was Pennant Group’s (NASDAQ: PNTG) finalizing its two-stage, $80 million acquisition of Signature Healthcare at Home, adding its Oregon operations to the previously closed Washington and Idaho locations.
Providence, a not-for-profit health system, and Towerbrook- and Ascension-backed Compassus, a provider of home-based care services, announced the formation of a joint venture for home health, as well as hospice, community-based palliative care, and private duty caregiving services. The new entity is operating as Providence at Home with Compassus, with 24 home health locations and 17 hospice and palliative locations across four states, and private duty operations in Southern California.
DispatchHealth announced in March that it had reached an agreement to acquire Medically Home, “extending care into patients’ homes across 50 major metropolitan areas in collaboration with nearly 40 health systems and most major health plans and value-based care organizations,” according to a Home Health Care News report. DispatchHealth is backed by a consortium of venture sponsors, led by Optum Ventures.
Baptist Health announced the formation of a joint venture with Midwest-based home health provider Alternate Solutions Health Network to expand services across Kentucky, southern Indiana, and southern Illinois.
Renovus Capital Partners, a lower middle-market private equity firm, announced a strategic partnership with Superior Health Holdings. The platform deal enables Superior to expand its home health and hospice services in Louisiana and into neighboring states.
A Florida-based multi-location home health provider was acquired by an independent sponsor. Details remain confidential.
Hospice M&A
Hospice volume is up slightly, but still down the most of the three categories within the home-based care sector, relative to the bubble of 2021. Seven deals were announced in Q1, up from five the prior quarter.
Demand remains very strong for hospice, but getting deals closed has been challenging. Buyers are rightfully nervous about potential risk for Medicare clawback because of poor billing documentation, Mertz said.
“We’ve been advising owners to get a billing audit done before they go to market,” Mertz said. “If you’re considering a sale anytime in the next three years, get an audit done now.This will give you time to make the appropriate adjustments, if necessary, to limit the potential clawback exposure for the ultimate acquirer.”
The following hospice deals were announced in Q1:
Bristol Hospice, a portfolio company of the private equity firm Webster Equity Partners, acquired St. Agatha Comfort Care in Las Vegas for an undisclosed sum.
Choice Health at Home remained active and expanded its services in Texas with its acquisition of Devotion Hospice. The deal was another step in Choice’s efforts to provide a home-based continuum of care in each of its Southwestern-based markets.
Minnesota-based St. Croix Hospice expanded its footprint in the Midwest with a pair of deals. St. Croix acquired Hospice of Siouxland in Iowa and some of Mayo Clinic Health System’s hospice assets in Minnesota. Financial terms of both deals were not disclosed, according to Hospice News.
Uplift Hospice acquired Star of Texas Hospice, expanding its average daily patient census to 450 across Arizona, Nevada, and Texas.
Home Care M&A
Any uncertainty stemming from the potential cuts to Medicaid spending is not deterring strategic buyers. A total of 17 home care transactions were announced in Q1, doubling up on the total from Q4 2024. Of the 17 deals announced, 11 were funded by Medicaid, across 10 states with nine different sponsor-backed strategic buyers.
The following deals were announced in Q1:
Peak Rock Capital, a middle-market private equity firm, completed its acquisition of BrightStar Group Holdings, a franchisor of home care services with more than 400 agencies nationwide.
Choice Health at Home bolstered its continuum of care for patients in Texas, Colorado, and the Southwest by acquiring Family Tree Private Care.
HouseWorks, an InTandem Capital portfolio company, expanded its footprint in Massachusetts with the acquisition of O’Connell Care at Home in Springfield and Best Home Care, which serves the Greater Boston area.
New Day Healthcare made two deals to strengthen its presence in the Houston area. First, it acquired Christian Senior Care Services, it then acquired Patient Recovery Home Healthcare Services. Mertz Taggart provided exclusive M&A advisory services to this transaction, representing the seller.
CareGivers of America announced a deal to acquire Florida-based Platinum Select Care.
Martis-backed Community Based Care, which provides services in six states, expanded its portfolio with its acquisition of TLC At Home in Albemarle, North Carolina.
Family Matters In-Home Care acquired Homecare California, with the latter set to take on Family Matters’ name and brand in the coming months.
Great Point Partners’ Family Resource Home Care announced a deal to acquire Beneficial In-Home Care, which operates six home care agencies in eastern Washington.
Gracepoint Home Care in Mobile, Alabama, announced that it has acquired the assets of Touching Hearts Senior Care.
A large Midwest adult day and HCBS provider sold to a financial sponsor. Mertz Taggart provided exclusive sell-side advisory services in this transaction.
VNS Health, a not-for-profit home- and community-based health care company, acquired Alliance Home Services, which serves the Bronx in New York.
If you are interested, you can also download the Q1 2025 Home-Based Care M&A Report via the following link:
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