At a Glance A behavioral health owner who grew a solo practice into a much larger New York City business shares ten lessons from selling it. Among them: get clear on why you are selling, interview several advisors and compare them side by side, choose a behavioral health specialist you trust, protect confidentiality from the first conversation, and organize your financials long before going to market. For many behavioral health practice owners, the decision to sell does not begin with a neatly defined exit plan. It may start with growth. It may start with fatigue. It may start with an unexpected inquiry from a buyer. Or it may start with a quiet realization that the business has become bigger, more complex, and more stressful than the owner wants to manage alone. That was the case for one clinical psychologist in New York City who recently shared their experience selling a behavioral health practice with Mertz Taggart. The owner had practiced for about 15 years and started as a solo practitioner. Over time the practice grew, and COVID accelerated that growth, since the organization was already comfortable working remotely and in the home. What had once been a manageable practice became a much larger business, with more pressure around cash flow, hiring, firing, and day-to-day management. When the owner grew to over 325 employees, it was time to do something different. "I couldn't see myself continuing to build the business on my own, ” the owner recalled thinking. “I would love to have a partner who was an expert in all the things I was not." That thinking led to a sale process that ultimately closed about a year later. Looking back, the owner described the outcome as financially rewarding, but also more emotional and complex than expected. For other behavioral health owners thinking about a future sale, this experience offers several practical lessons. 1. Know Why You Are Considering a Sale Before interviewing advisors or responding to buyer interest, get honest about your motivations. Are you trying to reduce the day-to-day management load, create financial security, avoid taking on a partner, set the business up for its next stage, or simply learn what the practice might be worth? The answer matters, because selling a behavioral health practice is not only a financial decision. It affects the owner, the employees and clinicians, the patients, the referral relationships, and the future identity of the organization. The owner we spoke with was not chasing a transaction for its own sake. The practice had grown, the responsibilities had become heavier, and selling became a way to create relief, reduce risk, and set up for the future. That clarity helped guide everything that followed. 2. Interview Multiple Advisors, but Compare Them Thoughtfully The owner interviewed five or six M&A advisors before choosing Kevin Taggart and Sandra Zervoudakis with Mertz Taggart. A few factors stood out during those conversations: • Cost structure • Process and communication style • Trust • Expected value • References • Behavioral health experience The owner was especially focused on whether the fee structure was simple and understandable. Some advisors quoted upfront costs or layered percentages that felt complicated, and simplicity mattered because the owner did not want to guess what the process would cost. Trust mattered just as much. New to M&A and selling a company for the first time, the owner wanted someone who could explain the process clearly, set realistic expectations, and feel like the right person to rely on through a high-stakes decision. Their advice to other owners: build a structured way to interview advisors so you can compare them fairly. Ask each of them similar questions, take notes, and understand the differences in process, fees, buyer approach, experience, and communication style. And do not be afraid to ask for references. → Related: Business Broker vs. Healthcare M&A Advisor: What Owners Should Know Before Choosing 3. Behavioral Health Specialization Matters Selling a behavioral health practice is different from selling a general business. The owner felt strongly that industry experience was essential, because behavioral health is a specialized market with its own buyer universe, terminology, risks, and operating dynamics. “I wouldn’t hire a gastroenterologist to examine my heart,” the owner said. In their view, few advisors truly specialize in behavioral health, which made the choice more important. The right advisor needed to understand the field, the buyers, and how to position the business so it made sense to the market. That expertise also matters when comparing buyers. The highest bid is not always the deciding factor. Fit, expectations, structure, and certainty to close all influence whether a buyer is the right choice. → Related: What Behavioral Health Owners Should Understand Before Comparing Offers 4. Confidentiality Is One of the First Fears Owners Face At the beginning of the process, the owner was most worried about people finding out. No one inside the company knew a sale was being considered, and there was real concern about competitors hearing the news, especially in New York City, where the market can feel smaller than it looks. Those fears are common. Owners worry about staff morale, rumors, referral relationships, and whether early information could create instability. It is one reason the process has to be handled carefully, and why owners should be thoughtful about who they involve, when they involve them, and how they eventually communicate a completed transaction internally. The owner noted that strong internal relationships make the announcement easier when the time comes. Weak or purely transactional ones create risk, and losing key people can do more than sting; it can put the deal itself in jeopardy. 5. The Process Is More Stressful Than Most Owners Expect The owner had been told the process would be stressful, and still found it hard to grasp until they were in it. The stakes were high, the experience was unfamiliar, and the owner had to trust an advisor, an attorney, and a buyer while continuing to run the practice. “It’s like giving your child over to strangers and having to trust them,” the owner said. For founder-led businesses, that feeling makes sense. Owners are used to being in control. They built the company, made the decisions, and carried the risk. A sale asks them to share information, wait for feedback, weigh unfamiliar options, and accept that parts of the process sit outside their direct control. The stage after the letter of intent is often the most stressful of all, when negotiations, legal questions, deal structure, and buyer requests arrive at once. This is where strong legal and M&A support matters most. 6. Calm, Honest Guidance Matters One reason the owner chose Kevin Taggart was his demeanor. Compared with other advisors, Kevin did not come across as overly negative or overly optimistic. He was matter of fact, realistic, and steady, and that made a difference. The owner described him as a “calm, stabilizing force” during a process that often felt uncertain. He offered guidance without pressure and made clear that the decisions ultimately belonged to the owner. The owner also valued that Kevin was willing to share his perspective early, before asking for any formal commitment. 7. Get Your Financials and Operations in Order Early One of the owner’s biggest lessons was the value of preparation. They wished they had organized their financials better before starting. Smaller practices often lack large finance or HR teams, which means data requests can fall heavily on the owner or a small internal group, and that becomes time-consuming fast. Preparation is not only about financials. It also means building the business for the future rather than only for today. Hiring, software, processes, and documentation all affect how smoothly a sale runs. Repeatable processes matter, whether it is onboarding, clinical documentation, or another part of the operation, because consistency helps you respond to buyer requests without unnecessary friction. That kind of preparation cannot be done 30 days before going to market. It takes time. → Related: How to Prepare Your Behavioral Health Business for Sale in 2026 8. Be Involved in How Your Story Is Told For a distinctive behavioral health business, the owner believes it is important to stay involved in how the company is presented to buyers. An advisor leads the process, but the owner knows the business best: what makes it different, how it grew, and which parts of the story should not be oversimplified. That does not mean managing the process alone. It means the advisor and owner work together, so the business is positioned accurately and thoughtfully. When a buyer does not understand something, they tend to move past it rather than dig in, so clarity is worth the effort. 9. Understand What You Are Giving Up Selling often means giving up some level of control, and for owners who built a practice from the ground up, that can be hard. The owner advised future sellers to think carefully about whether they are ready for that shift. It’s not enough to ask what the business can fetch. Owners also need to ask: • What do I want my role to look like after a sale? • How much control am I comfortable giving up? • What kind of buyer would I trust with the business? • What financial outcome would make the decision worthwhile? • What would make me walk away? The answers may change over time, but it helps to work through them before you are deep in a process. 10. Build a Network of People You Trust The owner also recommended talking to people beyond a single M&A advisor: other owners who have sold, attorneys, financial advisors, and people with private equity experience. Each conversation helps you understand the process from a different angle. The goal is not to crowd the decision with too many opinions. It’s to become more informed so the process feels less opaque. Deal structure, buyer differences, legal terms, rollover, and expectations can all be confusing the first time through, and having people around you who can explain the moving parts in plain language makes a real difference. A Sale Process Is Not Just a Transaction For this owner, the sale created a financial outcome they never imagined when they first opened the practice. “The deal of a lifetime,” as they described it. The broader lesson is simple. Selling a behavioral health practice is a major professional and personal decision, and it rewards preparation, clarity, trust, and the right advisory team. For owners who are not ready to sell today, the best first step may not be going to market at all. It may be getting educated, organizing your financials, thinking through your goals, and understanding what buyers would care about if the time comes. Mertz Taggart has advised behavioral health owners through the sale of their businesses for over twenty years. If you are starting to think about what’s next, a confidential conversation and an honest look at where your business stands is a good place to begin. Key Takeaways Get clear on why you are selling before you talk to advisors or buyers. Interview several advisors with the same questions, and weigh fees, process, references, and behavioral health experience. Choose a specialist. Behavioral health has its own buyers, terminology, and risks. Protect confidentiality from the first conversation, and invest in the relationships that make an eventual announcement easier. Organize your financials and operations well before going to market. Good preparation takes time, not weeks. The highest offer is not always the best. Weigh fit, structure, and certainty to close, and expect the stretch after the LOI to be the hardest part.

By Bruce Vanderlaan, JD, Mertz Taggart At a Glance Home health, home care, and hospice owners are fielding more cold calls from M&A “brokers” than ever. Many of these outreach efforts follow the same playbook: promise a specific buyer or a high multiple, lock the seller into an agreement, then flip the script. This is the broker bait-and-switch. It’s designed to generate a fee for the broker, not to maximize value for the seller. Before signing anything, owners should understand how this tactic works, what questions to ask, and why a competitive, seller-focused M&A process leads to a better outcome. Why Are So Many Brokers Calling Home Health Agency Owners Right Now? Demand for small- to mid-sized home-based care agencies remains high, even in a volatile M&A market. That demand has attracted a wave of brokers reaching out to agency owners with promises of interested buyers or attractive multiples, all without knowing anything about the business beyond a website. At the very least, anyone approaching you with promises of “interested buyers” or specific multiples should be cautiously received. If they haven’t done any diligence on your company, their promises are not grounded in reality. What Is the Broker Bait-and-Switch, and How Does It Work? The broker bait-and-switch is less a fixed sequence than an opportunistic process. The direction it takes depends on what the broker learns once they get you talking. It typically follows three steps: Step 1: The Bait. A broker contacts you claiming to have an interested buyer, multiple interested buyers, or a buyer willing to pay a steep price for your agency. No details are offered. The goal at this stage is not to share information; it is to get you on a call. Step 2: The Call. Once you agree to talk, the broker listens as much as they pitch. They are gathering information about your situation, your timeline, and how willing you appear to pay a fee. What you share in this conversation shapes what happens next. Step 3: The Switch. Depending on what the broker learns, the approach shifts in one of two directions. If you appear willing to pay a fee, they will ask you to do so, then go out and find a buyer after the fact. If you seem reluctant, they may turn to buyers directly, telling them they have an opportunity and asking whether the buyer will cover the fee instead. In some cases, the broker already has non-exclusive, buy-side arrangements in place with those same buyers, meaning they are positioned to collect from either side. The "specific buyer" from the initial outreach may never have existed. Sellers, and buyers for that matter, are likely to find this sort of process expensive, confusing, burdensome, and unprofessional. It leaves owners dissatisfied and fatigued at the end of a process they will likely go through only once. Essentially, the broker is intent on making a fee, regardless of who pays it. A legitimate M&A advisory firm, by contrast, will put significant effort into maximizing value for the seller. There is a lot of work that goes into going to market the right way, ensuring that the agency is ready for due diligence and that the transaction has a high likelihood of closing. Key distinction: Many of these brokers are “transaction” brokers. They represent the transaction, not you, and not the buyer. A legitimate sell-side M&A advisory firm represents the seller and puts significant effort into maximizing value. Why Is Having Only One “Interested Buyer” Almost Never in a Seller’s Best Interest? To avoid succumbing to this trick, the first thing sellers need to understand is that the pressure is not nearly as high as the broker makes it seem. Finding buyers is the easy part. There are plenty of strategic buyers and PE firms regularly looking for quality home health, home care, and hospice assets. The allure of an “interested buyer” should generally be ignored when no details are given. In fact, having “one” interested buyer is almost never in a seller’s best interest. When an owner is ready to sell, they should expect a transparent and competitive process from the outset. An experienced M&A advisory firm should engage with multiple qualified buyers to drive the best price and terms. That also allows the seller—and not the broker, who may just be looking for a fee via the bait-and-switch—to choose the best buyer. That choice will involve price, cultural alignment, certainty to close, post-closing obligations, and a host of other factors. Without backup offers, buyers are hardly likely to raise their offers or make compromises on other seller wishes. They are also more likely to negotiate on the basis of what is “reasonable” versus what is “market,” determined by a professional, competitive process. → Related: Your Company Might Be Great. That Doesn’t Mean It’s Valuable. What Questions Should Sellers Ask Before Signing a Broker Agreement? Sellers should not enter into vague agreements, no matter how eager they are to negotiate with so-called “interested buyers.” In order to ensure the process goes smoothly, they need to ask the right questions to the broker: 1. Who is the buyer? 2. Did the buyer specifically ask you to contact us? 3. Why is my company strategically interesting to them? 4. How did the buyer determine the price or multiple that you are claiming? 5. Is the buyer paying your fee? A respectable M&A advisor should have no problem answering these questions from the start. If they do, they likely do not have the seller’s best interests in mind. Key Takeaways The broker bait-and-switch uses the promise of a specific buyer to generate urgency and move toward a fee arrangement, regardless of whether a real, committed buyer exists at that stage or which side of the transaction will ultimately pay. Transaction brokers represent the deal, not the seller. A legitimate M&A advisory firm represents the seller and works to maximize value. A single “interested buyer” is almost never in the seller’s best interest. A confidential, competitive process with multiple buyers drives better price and terms. Before signing any agreement, ask the five questions above. If a broker can’t answer them, reevaluate. Selling your agency is likely a once-in-a-lifetime decision. If you’re being pressured, the answer should be “no.” Thinking About Selling Your Home Health, Home Care, or Hospice Agency? This is likely one of the most significant decisions you’ll make as an agency owner—and you only get to do it once. It makes sense to be cautious and informed. Mertz Taggart is a healthcare-focused M&A advisory firm that has completed over 160 transactions in home health, home care, hospice, and behavioral health. If you’re considering a sale and want to understand what your agency is worth, contact us for a confidential conversation.

Home-based care M&A volume stepped down in Q2 2026, with 16 transactions closed during the quarter — down from 27 in Q1 2026 and 29 in Q2 2025. Hospice and home care tied for the lead at 8 closed transactions each, followed by skilled Home Health at 6. Two additional deals were announced but not yet closed as of quarter-end. Two of the quarter’s closings ranked among the largest home-based care transactions on record: General Atlantic’s approximately $3 billion acquisition of TEAM Services Group and Kinderhook Industries’ $1.1 billion take-private of Enhabit. Together they underscore that, even as deal count cooled, large-cap sponsor capital remained firmly committed to scaled home-based care platforms. Cory Mertz, managing partner at Mertz Taggart, noted: “The count came down this quarter, and it’s fair to ask whether the regulatory environment is part of it — the fraud takedowns, the hospice 36-month rule, the new enrollment moratorium and enhanced oversight all make deals more complex to get across the line. But it’s one quarter, and the dollars tell the other side of the story. Sponsors are still writing big checks and, increasingly, looking to return capital to LPs after long hold periods.” Home-Based Care M&A By structure, the quarter comprised six new PE platform investments, four sponsor-backed strategic add-ons, one public-company acquisition, and five post-acute, or independent buyers. New-platform activity outpaced add-ons — a reversal of the add-on-heavy pattern of recent years — as several sponsors established fresh platforms in the sector. Note: Total industry transactions do not necessarily equal the sum of the sub-industries, as many transactions include more than one sub-industry. Home Health M&A Home health saw 6 closed transactions — including two new platform investments, one sponsor-backed add-on, and three other strategic or independent buyers — down from 8 in each of the prior two quarters. The quarter’s headline deal was Kinderhook Industries’ completed take-private of Enhabit, the home health and hospice provider that spun out of Encompass Health in 2022 and spent much of its time as a publicly traded company navigating Medicare home health reimbursement headwinds and investor skepticism. Enhabit shareholders received $13.80 per share in cash — a total enterprise value of roughly $1.1 billion (equity plus roughly $480 million of assumed debt), representing a 10.2x EBITDA multiple on $108 million of EBITDA, a 24% premium to the undisturbed share price and nearly 34% to the 60-day average. Cory Mertz offered this perspective: “The Enhabit deal is a good reminder of why we don’t lead with multiples. Enhabit shareholders received a 10.2x EBITDA, which sounds unremarkable for a billion-dollar, public company. But this was a 24% premium to market and nearly 34% to the 60-day average — significant by any measure.” Among other closings, PruittHealth acquired Georgia Home Health Services, extending its home health presence in South Georgia; Lucent Home Health acquired Chambers Home Health Agency of Northeast Texas, a combined home health and hospice operation; and Renovus Capital Partners-backed Superior Health Holdings added Chant Healthcare, entering Oklahoma across home care, home health and hospice. Heritage Home Health and Hospice and Legacy Hospice formed an Ohio joint venture. Hospice M&A Hospice matched home care at 8 closed transactions — three platform investments, two sponsor-backed add-ons, and three strategic or independent buyers — extending the steady, add-on-heavy consolidation that has defined the segment. Webster Equity Partners-backed Bristol Hospice acquired Hope Hospice & Palliative Care, while Norwest made a platform investment in Ennoble Care, a home-based care provider spanning home care and hospice. 5th Century Partners invested in Capstone Hospice, establishing a new platform, and Stillwater Hospice agreed to take over the hospice operations of Campbell County Memorial Hospital. Home Care M&A Non-medical home care tied for the lead at 8 closed transactions — three platform investments, three sponsor-backed add-ons, one public-company deal, and one independent buyer — powered by the quarter’s largest transaction. General Atlantic acquired TEAM Services Group, a San Diego-based, scaled home-based care services company, from Alpine Investors for a reported purchase price of approximately $3 billion — one of the largest home-based care transactions on record. TEAM’s EBITDA was reported, but the transaction’s EBITDA multiple can’t be reliably calculated: only the purchase price is known, not enterprise value. Elsewhere, Warburg Pincus made a platform investment in non-medical home care provider Cornerstone Caregiving, with financing from Monroe Capital; Addus HomeCare acquired HomeCourt Home Care, marking its entry into Indiana; Searchlight Capital Partners-backed Care Advantage added First Priority Home Care; SIG Partners-backed Pillar Health Group acquired Krista Care; and Feature Healthcare acquired Carepoint. One of the quarter's most significant announced (but not yet closed) transactions was Deacon Associates' agreement to acquire 31 home health and hospice agencies from HCA Healthcare (NYSE: HCA) , with terms undisclosed. The divested assets span eight states and will be folded into Central Pyramid, a Deacon subsidiary; the portfolio includes agencies HCA had picked up through its 2021 acquisition of an 80% stake in Brookdale Senior Living's health care services segment. The deal is expected to close in roughly three months, pending regulatory approval. It stands out as a large health system stepping back from home-based care even as operators like Deacon — in CEO Trey Crabb's words — "double down on home health and hospice." Cory Mertz added: “For owners weighing a process over the next 12 to 24 months, this environment rewards preparation. Diligence around billing and compliance has only intensified — especially in the enhanced-oversight states — and the sellers who invest early in getting their house in order are the ones who hold their value all the way through to close.” If you are interested, you can also download the .PDF version of the Q2 2026 Home-Based Care M&A Report via the following link:

By Cory Mertz, M&AMI, Managing Partner, Mertz Taggart The home-based care M&A market remains active in 2026 — but it's not uniform. For high-quality agencies with strong financials, clean compliance histories, strong management teams, established referral networks, stable census, and a favorable payer mix, buyer demand is real and premium valuations are still attainable — while multiples have come off their 2021 peak, they remain very strong by historical standards. For agencies that don't check enough of the right boxes, premium valuations are much harder to come by: buyers are interested but disciplined, and the path to a strong outcome may require more work. What has changed for everyone is the environment around the transaction itself. A combination of regulatory shifts, intensified fraud enforcement, and operational complexity is making deals harder to structure, take longer to close, and more dependent on experienced guidance to get across the finish line. Understanding these dynamics before going to market is increasingly what separates a smooth process from a difficult one. This article covers the major factors shaping home-based care transactions right now, what they mean for sellers, and how to navigate them. Before getting into the specifics, it's worth seeing how much of this is connected. The enrollment moratorium, the renewed bite of the 36-month rule, the enhanced oversight in high-risk states, and the recent enforcement takedowns are not separate events — they are facets of a single, coordinated federal crackdown on fraud in home health and, most acutely, hospice. Read together rather than as isolated hurdles, they explain both why the deal environment has tightened and why going to market well-prepared matters more than it used to. How Does the CMS Enrollment Moratorium Affect Your Sale? In May 2026, CMS announced a nationwide moratorium on new Medicare enrollments for home health and hospice providers. The moratorium, effective for an initial six-month period, was implemented as part of a broader effort to combat fraud, waste, and abuse in the Medicare program. For sellers, the immediate effect is arguably positive. Buyers who previously had the option to build de novo in a target market — rather than acquire — are now effectively forced into the acquisition lane. That increases buyer competition for existing Medicare-certified providers. What this means for sellers: Your existing Medicare certification has increased strategic value. But expect buyers and their counsel to spend more time on transaction structure and due diligence, so build extra time into your closing timeline. What Is the 36-Month Rule, and Does It Affect Your Sale? One of the most frequently misunderstood obstacles in home health and hospice M&A is the 36-month rule. Under CMS regulations, a Medicare-certified home health agency or hospice that was acquired, changed ownership, or was initially enrolled within the prior 36 months may be subject to restrictions on a subsequent change of ownership. In practical terms, this means that if your agency was acquired, enrolled, or involved in a prior transaction within the last three years, a buyer may not be able to complete a CHOW without triggering additional scrutiny, delays, or — in some cases — the need to re-enroll entirely. The 36-month rule affects de novo agencies, recently acquired agencies, and providers that have undergone structural changes such as mergers or entity reorganizations. It is not always apparent on the surface. A good advisor will surface this before you go to market. When sellers aren’t prepared, it can create real friction in an otherwise clean deal. There are exceptions — for example, when a parent company undergoes an internal restructuring, or when the agency has filed two consecutive years of full cost reports since its last ownership change — but they are narrow and fact-specific. What this means for sellers: Know your agency’s Medicare enrollment history and whether the 36-month window applies before you go to market. An experienced advisor will surface this early — before you're in exclusivity with a buyer and the clock is ticking. How Is the Fraud Crackdown Changing Buyer Diligence? Home-based care has been under increasing government scrutiny, and that trend has accelerated in 2026. CMS, OIG, and the Department of Justice have all signaled increased enforcement focus on home health and hospice billing practices — including documentation practices and length-of-stay patterns in hospice. The scrutiny is most acute in hospice. The same fraud concerns that prompted the enrollment moratorium have produced a coordinated crackdown: CMS has imposed heightened screening on hospices that are newly enrolling or changing ownership in the states it considers highest-risk — Arizona, California, Georgia, Nevada, Ohio, and Texas — and is rolling out a public hospice scoring system to flag providers with concerning utilization, quality, or compliance patterns. On the enforcement side, CMS, OIG, and the Department of Justice have suspended payments to hundreds of suspect providers — including roughly 800 hospices and home health agencies in the Los Angeles area — and continue to prosecute the operators behind sham hospice schemes. For hospice owners, that means buyers and their regulatory counsel will scrutinize eligibility documentation, length-of-stay, and live-discharge patterns especially closely, and a clean, well-documented patient record is now a genuine differentiator. For sellers, the direct impact is in the diligence process. Buyers — particularly those backed by private equity or working with healthcare regulatory counsel — are doing more work on billing compliance than they were two or three years ago. Claim-level review, documentation audits, and outside regulatory counsel are now routine on transactions of any meaningful size. This doesn't mean your agency has a problem. Most well-run providers have nothing to worry about. But it does mean that buyers are spending more time on compliance review, and that any practice that could be perceived as inconsistent with CMS guidance will require explanation and documentation. What this means for sellers: A billing audit before going to market is no longer optional — it's table stakes. Identifying and resolving compliance questions before a buyer finds them puts you in a far stronger negotiating position. Surprises in diligence are deal killers. This is even more critical in the enhanced-oversight states, where hospice providers face the closest scrutiny. How Do State Regulations Affect Your Sale? Beyond federal CMS requirements, state-level regulatory environments vary significantly and are becoming increasingly important in home-based care transactions. Several states have enacted or are enforcing heightened oversight of home health and hospice providers — California in particular has seen significant regulatory activity affecting transactions in that market. State licensure transfers and Certificate of Need (CON) requirements add layers of complexity that vary by geography. Over the past two years, state legislatures have also moved aggressively to insert themselves directly into deal review. At least 14 states — California, Washington, Oregon, New York, Massachusetts, Connecticut, Illinois, Indiana, Colorado, Minnesota, Nevada, Hawaii, New Mexico, and Vermont — now require advance notice to the state Attorney General or a related agency before a private equity, hedge fund, or MSO-affiliated transaction can close, with Rhode Island and Maine adding similar requirements in 2026 and several more states advancing legislation. Some of these laws require notice only; others, like Maine's and California's, give the reviewing agency actual power to approve, condition, or block the deal. That's a meaningful departure from how healthcare deals have historically cleared antitrust review: federal Hart-Scott-Rodino (HSR) clearance is a single, uniform process with one threshold and one timeline, regardless of where the parties operate. The new state layer is the opposite — a patchwork of different thresholds, notice periods, and reviewing powers that stacks on top of HSR rather than replacing it, and often applies even to deals well under the federal size threshold. For multi-state providers, the complexity multiplies. A transaction that is straightforward in one state may involve multiple parallel regulatory processes in another. Indiana is a useful example of how state and federal rules can compound. Under a recent state mandate, home health agencies enrolled in Indiana Medicaid must also be enrolled as Medicare providers to keep receiving Medicaid reimbursement — a requirement effective July 1, 2026, with a final completion deadline of June 30, 2027 for agencies that began the process on time. For agencies that were previously Medicaid-only, enrolling in Medicare starts a fresh 36-month clock — which can make them difficult to sell until that window closes, because a buyer's change of ownership within 36 months of the new Medicare enrollment would keep the provider agreement from conveying. What this means for sellers: Know your state-specific regulatory requirements before going to market, and ensure your advisor knows how to navigate state-specific regulatory requirements. State-level issues that surface late in a transaction can cause delays and force renegotiations. Do 1099 Caregivers Create Risk When Selling? Home care agencies — particularly those using independent contractors for care delivery — have faced increased scrutiny around worker classification. Federal and state regulators have been active in examining whether caregivers classified as independent contractors should be treated as employees, with significant implications for payroll taxes, benefits obligations, and liability exposure. Buyers are well aware of this issue and typically conduct labor compliance reviews as part of diligence. Agencies with a high proportion of 1099 workers will face questions about the structure of those arrangements and whether they are defensible under applicable law. What this means for sellers: If your agency relies on independent contractors, have a clear and documented rationale for that classification. In some cases, transitioning workers to employee status before going to market may be appropriate. Your advisor can help you assess the risk and determine the right approach. What Does This Mean for Owners Considering a Sale? None of the above should be read as a reason not to sell. Demand across home health, hospice, and home care remains strong for well-positioned agencies, and even companies that don't check every box are transacting — it just requires more preparation, more patience, and more experienced guidance. What it does mean is that the path from LOI to close is more complex than it was a few years ago — and that complexity has a cost. Deals that surface compliance issues or regulatory gaps in diligence are more likely to fall apart, take longer to close, or close at a lower price than the owner expected. The owners who are achieving the best outcomes right now are the ones who understand where they stand before they go to market — clean financials, a billing audit behind them, a clear picture of their Medicare enrollment history and compliance status, no unresolved audits, surveys, or other regulatory issues that could hold up a deal, and an advisor who understands how these issues play out in a transaction. If you are considering a sale in the next one to three years, the best time to start that preparation is now. Cory Mertz, M&AMI, is Managing Partner at Mertz Taggart, a sell-side M&A advisory firm specializing in home health, hospice, home care, and behavioral health transactions. Mertz Taggart has closed more than 109 transactions across 35 states since 2014. To discuss a potential sale confidentially, contact Mertz Taggart at mertztaggart.com.

By Cory Mertz, M&AMI, Managing Partner, Mertz Taggart At a Glance A letter of intent, or LOI, sets the framework for selling your business: the price, the deal structure, and an exclusive period to complete the deal. Most of it is not binding, but the exclusivity usually is. Signing it is the moment your negotiating leverage flips, so the terms are worth getting right before you sign, not after. When you sell a healthcare business, one moment shapes much of what follows more than owners tend to expect: the day you sign a letter of intent. By then, you have a serious buyer, a number on the table, and real momentum, and signing can feel like the deal is essentially done. It usually is not, and a few of its terms carry more weight than they first appear. Here is what to understand before you sign one. What a letter of intent actually commits you to A letter of intent, often called an LOI, is the document a buyer and seller sign to lay out the main terms of a deal and a plan to reach closing. It typically covers the price, the broad structure of the deal, the timeline, and the major conditions that have to be met. Most of those terms are not legally binding, just a statement of intent, a framework both sides agree to work from while diligence is conducted and the details are finalized. A few parts of the LOI usually are binding, and one matters more than the rest: exclusivity. When you sign, you generally agree to stop talking to other buyers for a set period, often 60 to 90 days, while this buyer completes their work. Confidentiality is typically binding as well. So the document that can feel non-committal, because the price is not locked, actually does commit you to one thing that is hard to undo, which is taking your business off the market for everyone else. Your leverage is highest the moment before you sign The reason exclusivity matters so much is what it does to your negotiating position. Up to the point you sign, a well-run sale keeps more than one qualified buyer interested, and that competition is what gives you leverage. Buyers who know others are at the table tend to put forward their strongest terms and move with urgency. The moment you grant exclusivity, that dynamic changes. You have committed to one buyer, the others have stepped back, and the pressure that produced a strong offer is gone. This is why the terms in the LOI deserve real attention before you sign rather than after. Anything you would want to negotiate, whether on price, structure, or conditions, is easier to address while you still have alternatives. It also helps to keep the exclusive period as short as is reasonable, with clear milestones and a firm end date, so a buyer cannot let diligence drift while your business sits off the market. → Related: Seller Beware: Going Direct with a Buyer Could Cost You Millions The price in the LOI is not the price you close on The number written into the LOI is a starting point, and the period that follows it is where that number gets tested. After both sides sign, the buyer begins detailed due diligence, a close review of your financials, contracts, compliance, and operations. That review can confirm the offer, or give the buyer reasons to lower it, a practice known in the industry as re-trading, and it is most likely when diligence turns up something the buyer did not expect. The best protection against a re-trade is built before you ever sign. Clean, well-organized financials, documented compliance, and earnings a buyer can verify give a buyer far less room to revise the number downward. It also helps to understand the buyer’s reputation. Some buyers are known for honoring their LOI, and others are known for using diligence to chip away at the number. That history is worth knowing before you take your business off the market for them. Read the deal structure before you sign, not after An LOI does more than name a price. It also sets the structure of the transaction and that structure is hard to renegotiate once you are committed. The LOI sets how the purchase price is paid: how much is guaranteed cash at closing, and how much is tied to what happens later, through pieces like rollover equity, a seller note, holdback, or an earnout. Weighing those pieces against each other is a subject of its own. The point at the LOI stage is simpler, because these terms are far easier to influence before you sign than to define or, worse case, renegotiate afterward. Look closely at how much of the price is guaranteed versus conditional, and treat the conditional portions as possibilities rather than certainties. Earnouts in particular deserve scrutiny, and we generally push back on them and try to keep them out of a deal, or we simply treat them as “icing on the cake”. → Related: Have an Offer to Buy Your Home Care Agency? What to Do Next The buyer behind the LOI decides whether it closes A signed LOI is only as good as the buyer’s ability and intent to finish the deal. The risk here is specific to the LOI. Once you grant exclusivity, a buyer who cannot finish the deal has tied up your no-shop period and your momentum. If the deal then falls apart, you are back at the start, after months spent on a buyer who could not close. So, before you sign, it helps to understand whether the buyer can actually fund and complete the transaction. A buyer with capital in hand tends to move quickly and predictably, while one who still has to raise the money, or who has a habit of renegotiating, brings more risk. A high number is not worth much from a buyer who cannot get to closing. The stretch between the LOI and the closing table is where deals are most often won or lost. It is detailed and demanding, and it is where unexpected problems tend to surface. Many advisors step back once the LOI is signed. Staying closely involved through diligence and closing, keeping the process moving and heading off problems before they become leverage for the buyer, is where advisors earn their keep. Key Takeaways A letter of intent sets the framework for the deal: price, structure, timeline, and an exclusive period. Most of it is not binding, but the exclusivity usually is. Your leverage is highest right before you sign. Once you grant exclusivity, the other buyers step back and the pressure that produced a strong offer is gone. Get the terms right before you sign, not after. Keep the exclusive period as short as is reasonable, with clear milestones and an end date. The price in the LOI can still move. Clean, verifiable financials are the best protection against a buyer lowering the offer during diligence. Read the structure carefully. Separate what is guaranteed cash at closing from what is conditional, such as rollover equity, seller notes, and earnouts. A signed LOI is only as good as the buyer’s ability to close. A buyer who cannot fund the deal can cost you hours of your time, the ability to move forward with another buyer and your momentum. Deciding whether to sign an LOI, and on what terms, is one of the most consequential moments in selling a business, and it is far easier with someone who has been through it many times. Mertz Taggart is a healthcare M&A advisory firm that represents owners through the sale of their businesses, from the first conversation through diligence and closing. We help owners understand what an LOI really commits them to, hold the line on terms, and keep deals moving to a close. If you have an LOI in front of you, or expect one before long, it is worth a confidential conversation before you sign. Let’s talk.

By Cory Mertz, M&AMI, Managing Partner, Mertz Taggart At a Glance Due diligence is the buyer’s detailed review of your business after you sign a letter of intent. Over roughly 60 to 90 days, their team verifies your financials, compliance, and operations before the deal closes. Most of it is predictable, and owners who are organized and prepared tend to move through it faster and hold on to the value they negotiated. By the time you reach due diligence in the M&A process, the hardest decisions are mostly behind you. You have run a process, weighed your offers, and signed a letter of intent with the buyer you chose. What comes next is the buyer’s turn to look closely at the business before the deal becomes final. Due diligence is that close look, the most intensive phase of a sale, and for many owners the least familiar, because selling a business happens once and most of diligence stays out of view until you are in the middle of it. Knowing what to expect, and preparing for it, is most of what makes it go smoothly. When diligence starts, and what the buyer is doing Due diligence begins once you sign the letter of intent, and it runs on an exclusive basis, which means you have agreed to work only with that buyer while it is underway. Diligence is a confirmatory process: during the sale, the buyer formed a view of your business from the materials and conversations you provided, and this is where they verify that view before signing a definitive purchase agreement. That review runs on two tracks: confirming that the business is what you represented, and identifying material liabilities that were not apparent in the materials you provided, particularly exposure with payers and government agencies such as CMS, the IRS, and the Department of Labor. Most reviews run roughly 60 to 90 days, though larger or more complex businesses can take longer. The shared goal is a clean close, with the buyer confident in what they are buying and you holding the terms you agreed to. What buyers actually examine Diligence covers far more than the financials. The buyer’s team reviews the business across several areas at the same time, usually through a secure online data room where you post documents as they are requested. The main areas include: Financial. Validating your reported earnings, anchored by the quality of earnings review covered in the next section. Legal and corporate. Contracts, leases, ownership records, and any past or pending litigation. Regulatory and compliance. Licenses, Medicare and Medicaid provider numbers, accreditation, and billing and HIPAA compliance. This is where healthcare diligence runs deeper than most industries. Operational. How the business runs day to day, including staffing, referral sources, and payer mix. Clinical. In care-delivery businesses, a review of a sample of patient charts, typically 30 to 200 depending on the size of the business. People. Payroll, employee classification, key staff, and employment agreements. These run in parallel rather than one after another, which is why the volume of requests early on can feel heavy, though it eases as you work through it. The quality of earnings review is the center of it Of all the workstreams, the financial review draws the most attention, and at its center is the quality of earnings review, usually called a QoE. In a QoE, the buyer hires a third-party accounting firm to confirm that your reported earnings are accurate and sustainable. The firm works through the detail behind the numbers, transaction by transaction, including your add-backs. Add-backs are expenses you remove from earnings because they will not carry over to the new owner, such as a one-time legal cost or an owner expense the business will no longer have. The QoE tests whether each one holds up, because those adjustments feed directly into the value. If the review supports your earnings, it confirms the basis for the price. If it raises questions, the buyer may revisit the number. Much of how a QoE goes is settled long before it starts. We prepare our clients for these questions before they go to market, so that by the time the buyer’s accountants dig in, there are rarely surprises. → Related: How to Prepare Your Behavioral Health Business for Sale in 2026 It is not only documents: site visits and interviews Diligence is not entirely a paper exercise. At some point the buyer will want to see the business in person and meet the people who run it. Expect one or more site visits, where the buyer assesses the operation firsthand, and interviews with you and sometimes a few key members of your team. These are not interrogations. The buyer is trying to understand how the business actually works and who makes it run, which is part of what they are paying for. This is also where confidentiality gets sensitive, because staff often do not know the business is for sale. A well-run process manages who is told and when, so the people you rely on hear it the right way. The harder challenge is less visible: diligence runs while you are still operating the business, and letting performance slip during it is one of the costlier mistakes an owner can make, because the buyer is watching current results the whole time. How problems surface, and how the agreed price can change Diligence is also where surprises come to light, and where the number you agreed to can move if they do. When the review turns up something material, the buyer may ask to revise the price or the terms. That could be overstated earnings, a compliance gap, or more customer concentration than they expected. Reducing the offer after the LOI is common enough to have a name, re-trading, and it is most likely when something in diligence does not match what the buyer was told. Most re-trades trace back to something that could have been found and fixed earlier. Clean financials, current licenses, organized records, and a management team ready for the questions all reduce the chance of a late price reduction, and most of that work is done before diligence ever starts. Your job during diligence is to respond to requests quickly and accurately, and to keep the business performing. Consistent file naming and timely responses sound minor, but delays slow the deal and can wear down a buyer's confidence. Your attorney handles the purchase agreement and legal risk, your accountant works through the QoE and working capital, and your advisor coordinates across everyone to keep the deal moving A lot of advisors step back once the LOI is signed. We stay closely involved through diligence, because pushing the deal to closing efficiently is a large part of what we are there for. → Related: Overcoming Common Challenges in Home-Based Care M&A Key Takeaways Due diligence begins after you sign the LOI and runs on an exclusive basis, usually about 60 to 90 days. The buyer reviews the business across several areas at once: financial, legal, regulatory and compliance, operational, clinical, and people. The quality of earnings review verifies that your reported earnings are accurate and sustainable, including your add-backs. Expect site visits and interviews, not only document requests, and plan for how confidentiality is handled while you keep the business running. The agreed price can change if diligence turns up material problems, so the preparation you do before diligence is what protects your value. Responsiveness and organization keep the deal moving, and your advisor, attorney, and accountant each carry part of the work. Due diligence rewards preparation more than almost any other part of a sale, and the owners who move through it cleanly are usually the ones who got ready long before a buyer was at the table. Mertz Taggart is a healthcare M&A advisory firm that has represented owners across home health, home care, hospice, behavioral health, and infusion therapy for over twenty years. We prepare our clients before they go to market and stay closely involved through diligence and closing, so the value you negotiated is the value you keep. If you are getting ready to sell, or want to understand what diligence will ask of you before you start, it is worth a confidential conversation. Let’s talk.

By Kevin Taggart, CM&AP, Managing Partner, Mertz Taggart At a Glance When buyers make offers on a behavioral health business, most owners look first at the multiple. That’s understandable, but it can be misleading. A strong offer depends on more than the headline number. Owners should look closely at how much cash they’ll receive at closing, how much of the price is tied to future conditions, and whether the buyer is truly able to close at the value presented. If you own a strong behavioral health business, buyers are reaching out. Private equity firms, larger operators, and investor groups building platforms in the space are all actively looking, and it is not unusual for more than one to reach out in the same week. At some point, those conversations may turn into real offers. When they do, it’s natural to focus on the multiple. A multiple is simply how many times your normalized cash flow (or Adjusted EBITDA) a buyer is willing to pay. If your business earns $2 million a year and a buyer offers eight times earnings, that suggests a $16 million deal. That shorthand is useful, but it can also be misleading. A multiple doesn’t tell you how much money you’ll receive at close, how much risk is built into the offer, or whether the buyer can execute. Why the multiple is only part of the picture A multiple only matters in relation to the earnings figure behind it. Most buyers start with adjusted EBITDA, which is a measure of normalized earnings before interest, taxes, depreciation, and amortization. But not every buyer calculates adjusted EBITDA the same way. One buyer may use last year’s results. Another may use the most recent few months and annualize them. A third may factor in synergies. That means the same multiple can produce very different results. Two offers that look far apart on paper may be much closer in actual dollars. Two offers that look similar may not be similar at all. For example, one buyer may offer seven times AEBITDA and another may offer five times AEBITDA. At first glance, seven sounds better. But if the seven-times offer is based on last year’s lower earnings, and paid out over time, while the five-times offer is based on the business’s current performance, and paid in cash at closing, the lower multiple may actually produce more value. Before comparing offers, there are many questions worth asking each buyer. Two of the most important: How are you determining adjusted EBITDA? How is the purchase price paid out? Then compare the dollars, not just the multiple. What reaches your account matters more than the headline number The number a buyer quotes is usually the total value of the deal. It is not necessarily the amount you take home at closing, or ever. Several items can reduce the cash you receive at closing. Business debt is typically paid off first. There will likely be a working capital target and subsequent adjustment to account for the cash and short-term assets needed to keep the business operating. A portion of the purchase price is always held in escrow for a period after closing to cover any liabilities that arise from the seller's period of ownership. Other forms of consideration that affect your net proceeds include a seller note or an earnout. Once those items are factored in, two offers with the same headline value can produce very different outcomes. A slightly lower offer with more cash at closing, a cleaner working capital adjustment, and no earnout may be stronger than a higher offer with more conditions attached. The number worth comparing is not only the purchase price. It is what you are likely to receive, when you are likely to receive it, and how much uncertainty sits between the offer and the final outcome. Not every dollar in an offer is guaranteed Every offer includes some combination of guaranteed money and conditional money. Owners should separate the two before deciding which offer is truly stronger. Cash paid at closing is the most certain part of the deal. Other forms of consideration usually depend on what happens later. One common example is rollover equity. Instead of taking the entire purchase price in cash, you reinvest part of your proceeds into the buyer’s larger company and become a part owner. This can be a meaningful opportunity, but its value depends heavily on the buyer. If the buyer is well-run and continues to grow, the rollover may become worth significantly more than the cash you reinvested. If the buyer struggles, that equity may be worth far less.(maybe add, “even worthless”?) The percentage matters, but the company you are rolling into matters just as much. A seller note is another example. This means the buyer pays part of the purchase price over time, with interest, effectively making you a lender until the note is paid off. An earnout goes a step further, tying part of the purchase price to future performance targets. We generally push back on earnouts and try to keep them out of the deal. When they cannot be avoided, owners should treat that portion of the offer as conditional, not guaranteed. A simple way to compare offers is to start with the guaranteed money. Then look at the conditional pieces separately and ask what has to happen for that money to be paid, and what are the chances of it happening? This will usually be in the form of a range. Who is behind the offer affects whether it closes A strong offer only matters if the buyer can complete the transaction. Not every buyer has capital ready. Some buyers, including many larger private equity firms, have committed capital and can fund a transaction directly. Others raise capital deal by deal after agreeing to buy a business. These buyers, often independent sponsors or search funds, may be credible, but the funding process adds time and risk. That difference matters. A buyer who still needs to raise the money may take longer to close. In some cases, the capital may not come together at all. A slightly higher offer from a buyer still raising funds is not the same as a slightly lower offer from a buyer with committed capital, an industry thesis, and a clear path to closing. In a competitive process, certainty has value. The best offer is not always the highest number. It is the offer that gives the owner the strongest combination of value, terms, buyer fit, and likelihood of closing. Every transaction will have challenges before closing. Understanding who the buyer is, how they plan to fund the deal, and how they behave in the process is essential to separating a real offer from a number on paper. → Related: Seller Beware: Going Direct with a Buyer Could Cost You Millions Why the offer you accept can still change before closing The offer you accept is not always the number you close on. After both sides sign a letter of intent, the buyer reviews the business in detail. That process can confirm their valuation assumptions, but it can also cause the buyer to revise the offer. One of the most important parts of that review is the quality of earnings process. A quality of earnings review examines whether the company’s reported earnings are accurate, sustainable, and supported by the financial records. There is judgment involved, especially around add-backs. Add-backs are expenses a seller adds back to profit because they are not expected to continue after the sale. Different reviewers may reach different conclusions about which add-backs are valid and how earnings should be measured. That is why a strong offer is not only about the number presented upfront. It’s also about how well that number can hold up once the buyer performs their quality of earnings. Clean financials, strong compliance, clear documentation, and a strong management team all help protect value. Those strengths are usually built long before an offer arrives. They give buyers confidence and reduce the chances of a late-stage price reduction. When comparing offers, owners should consider how each offer is likely to hold up during diligence. A slightly lower offer that survives the review may be better than a higher offer that gets retraded before closing. → Related: How to Prepare Your Behavioral Health Business for Sale in 2026 Key Takeaways A multiple is only a starting point. It does not tell you what you’ll actually receive. Compare offers based on actual dollars, cash at closing, timing, and certainty. Separate guaranteed money from conditional money, including rollover equity, seller notes, and earnouts. If rollover equity is part of the offer, evaluate the buyer carefully. The company you join matters as much as the percentage you receive. A buyer with committed capital is generally more likely to close than one still raising money. The offer you accept can change during diligence, so clean financials and strong documentation help protect value. The strongest offer is usually the one that balances price, structure, buyer fit, and certainty to close. Comparing offers is difficult to do on your own, especially when each buyer presents value in a different way. It is also one of the most important parts of a well-run sale process. Mertz Taggart is a healthcare M&A advisory firm that represents behavioral health owners through the sale of their businesses. We help owners look beyond the headline number, understand the real value and risk in each offer, and negotiate from a stronger position through a disciplined, competitive process. If you are weighing an offer now, or expect to receive one soon, it’s worth having a confidential conversation before you respond.

By Cory Mertz, M&AMI | Managing Partner, Mertz Taggart At a Glance Healthcare business owners considering a sale or recapitalization will encounter business brokers, M&A advisory firms, and investment banks. Each serves a purpose, but they operate very differently. Brokers typically handle smaller transactions and market companies broadly. M&A advisory firms run structured, competitive processes targeting strategic and financial buyers. Understanding which path fits your situation can make a meaningful difference in your outcome. Not every transaction requires the same type of advisor. That’s the point I think healthcare business owners need to understand before they start comparing firms, fees, or processes. A business broker, an M&A advisory firm, and an investment bank may all help owners sell or recapitalize a company, but they’re not built for the same situations. This isn’t about one being good and the other being bad. Brokers serve an important role in the lower end of the market. For the right type of business, a broker-led process can make sense. But when you’re talking about a sizable healthcare services business, especially one that could attract strategic acquirers or private equity-backed buyers, the process needs to be different. The advisor you choose should match the business you built, the buyer universe you need to reach, and the outcome you’re trying to achieve. You only get to do this once. Brokers, M&A advisors, and investment banks are not the same thing The lines can get blurry because people often use these terms interchangeably. But there are important differences. A business broker typically works on smaller transactions, often owner-operated businesses generally up to $2–3 million in enterprise value, though the range varies. The process is usually listing-driven. The broker prepares basic materials, markets the opportunity broadly, sometimes through listing websites like BizBuySell, and waits for interested buyers to come forward. That model can work well when the buyer universe includes individuals, searchers, or someone looking to buy themselves a career. They call them listings. For us, they’re engagements. It’s a different mindset. An M&A advisory firm typically works with larger, more complex companies, usually $5 million and above in enterprise value, sometimes lower depending on the situation. Instead of listing the business publicly, the advisor identifies a curated group of strategic and financial buyers, prepares a comprehensive data book and offering memorandum, manages confidentiality, runs buyers through a coordinated process, and negotiates from competitive leverage. An investment bank is a more specific designation. Investment banks are registered with the SEC as broker-dealers. They may be involved in debt raises, capital raises, growth equity, Series A, B, or C financing, and other work that requires that registration. M&A advisory firms are not licensed for that kind of work. What they can do — and what Mertz Taggart does — is represent owners in majority-stake M&A transactions, including private equity recapitalizations. In everyday conversation, people sometimes use “investment bank” to describe any firm running a larger M&A process. But technically, not every M&A advisory firm is an investment bank, and that’s an important distinction. For most healthcare business owners, the more practical question isn’t the label. It’s this: what type of process does my business require? A listing is not the same as a competitive process One of the biggest differences between a broker and an M&A advisor is how the business goes to market. For brokers, the company is often treated like a listing, with an asking price. The business may be posted on a website or marketed to a broad audience. Offers come in as they come in. There is no established timeline. The seller reviews them one at a time. If one looks reasonable, the parties may move to a letter of intent or even a purchase agreement quickly. That can be appropriate for some businesses. But a larger healthcare services company is different. You’re not trying to find just any buyer. You’re trying to identify the right buyer, at the right time, under the right conditions, with the right terms. A competitive M&A process brings qualified buyers to the table on the same timeline, with the same information, and with a clear understanding that they’re competing. That structure changes buyer behavior. It creates urgency. It gives you a better view of the market. And it gives your advisor a stronger position when negotiating price and terms. → Related: 6 Considerations When Choosing a Home-Based Care M&A Advisor Not every transaction is an exit Here’s something else worth understanding. When people hear “selling a business,” they usually picture the owner walking away with a check. That happens, but it’s not the only type of transaction. We draw a distinction between an exit and a transaction. An exit means the owner sells everything and walks away. A transaction can also mean selling a majority stake to a financial partner while usually staying on to run the business — same owner, different capital structure. That second scenario is a big one. A lot of owners have grown their companies to a point where they want to take some chips off the table, bring on a partner with resources, and take the business to the next level. That’s not an exit, that’s a recapitalization, that requires a process built for that kind of buyer. This is typically a financial sponsor (private equity firm, family office, independent sponsor), not an individual looking to buy a business. Why does healthcare M&A require specialized experience? Healthcare transactions are not generic business sales. A home health agency, hospice, home care company, behavioral health provider, or infusion business comes with a specific set of factors buyers will evaluate closely: reimbursement risk, referral diversity, clinical documentation, compliance history, quality metrics, payer mix, transition risk, and management depth. Most owners understand their business operationally but may not know how buyers evaluate those same factors in a transaction context. That's where healthcare-specific experience matters. A good advisor isn't just finding a buyer. The advisor should be helping you understand what buyers will focus on before the business is exposed to the market, which issues are likely to surface during diligence, which buyers are credible, which are known for retrading after an LOI is signed, and which are most likely to value the specific strengths of your company. That kind of judgment is different from general M&A experience, and different again from having built and sold a healthcare business yourself, which is the perspective Mertz Taggart's principals bring to every engagement. The stakes around process and buyer selection are real. The wrong buyer can consume months without closing. The wrong process creates unnecessary market exposure, and in healthcare, where agencies operate in tight-knit communities, confidentiality is not a courtesy. It's a strategic requirement. A company surfacing on a listing website creates a fundamentally different dynamic than one introduced confidentially to a pre-qualified buyer list. The right advisor helps reduce surprises Owners often focus on price, and they should. For many founders, the business represents most of their net worth. Getting the best possible outcome matters, but price is only one part of the transaction. A strong M&A process is also designed to reduce late-stage surprises. That means setting expectations early, preparing buyers properly, managing information flow, and keeping pressure on the process from first outreach through close. Some of the most difficult issues in a transaction don’t show up in the first offer. They show up later, during diligence, legal negotiations, financing, regulatory review, or final closing mechanics. That’s when advisor involvement matters most. In a broker-led process, much of the heavy lifting happens before the LOI is signed. In a larger M&A process, the LOI is not the finish line. It’s the beginning of a more demanding phase. Your advisor should still be there, still pushing, still protecting your interests, still managing the buyer toward close. → Related: How to Sell Your Home Care Agency: 3 PE Exit Strategies Questions to ask before choosing an advisor Before hiring anyone, ask direct questions about the process. The answers will tell you a lot about how they work and whether they’re the right fit for your situation. Who is the likely buyer for my business? Will you market the company broadly, or will you build a targeted buyer list? Will my business be publicly listed anywhere? What materials will you prepare before going to market? How do you protect confidentiality? How many buyers will be contacted, and how will they be screened? Do you have relationships with strategic and financial buyers in my sector? What happens after an LOI is signed? Who will be involved during diligence and negotiation? How do you create competition instead of simply fielding interest? Key Takeaways Business brokers handle smaller transactions and market companies broadly through listing sites. M&A advisory firms run targeted, competitive processes with strategic and financial buyers. Not every transaction is an exit. Some owners are bringing on a financial partner while staying involved. That kind of deal requires a process built for institutional buyers, not individuals. Healthcare M&A requires industry-specific expertise around reimbursement, compliance, quality metrics, and buyer behavior. Generalist approaches can leave value on the table. A competitive process changes buyer behavior. It creates urgency, gives you a clearer picture of the market, and strengthens your advisor’s negotiating position. The LOI is not the finish line. The advisor’s role through diligence, legal negotiation, and closing mechanics is where outcomes are protected or lost. Ask direct questions about the process before choosing an advisor. How they go to market tells you more than what they promise. Ready to learn more? If you’re thinking about what’s next for your healthcare business, whether that’s a full exit or bringing on a financial partner, we’re happy to have a confidential conversation. No pressure. No obligation. Just a straightforward discussion about where you are, what your business might be worth, and what your options look like. Most owners wait longer than they should to start these conversations, not because they aren’t thinking about an exit, but because they aren’t sure if the timing is right or whether the business is ready. Those are questions worth working through with an advisor who knows the market, before you’re in the middle of a process. Mertz Taggart has been advising healthcare services owners for nearly two decades. We know this space because we’ve lived in it. Reach out to start a conversation. Legacy Preserved. Value Enhanced.

By Cory Mertz, M&AMI | Managing Partner | Mertz Taggart | May 2026 At a Glance Home care agency owners have more access to deal data than ever, from published multiples to transaction announcements to AI-generated market summaries. But access to information isn’t the same as having leverage in a negotiation. Buyers know what they are willing to pay for your agency. They also know what you do not know. A competitive, advisor-led process is the mechanism that closes the information gap between sellers and buyers, and it is consistently the difference between an adequate outcome and a top-of-market one. I talk to home care agency owners every week who tell me they already know what their company is worth. They have read the industry benchmarks. They have seen the deal announcements. Some have run their own numbers through AI tools. The information is more accessible than it has ever been. But knowing what range the home care sector trades in and knowing what a motivated buyer will actually pay for your agency are two very different things. That second number only reveals itself when buyers are competing against each other. And the gap between what a buyer offers when they are the only one at the table and what they will pay when three or four others are in the room is not small. In a recent deal, we received twenty-three indications of interest on a single company. The lowest came in at roughly 40% of the highest. Every one of those buyers had the same information about the business. The difference wasn’t what they knew. It was what they stood to lose. What Do Buyers Know That You Don’t? When a buyer contacts you about your home care agency, they have already done more preparation than most owners realize. They know which geographies they need to fill. They know what their portfolio is missing. They know what their investors expect in terms of returns and timeline. And they know, within a tight range, what they have paid for agencies like yours in the past. You typically know none of that. You don’t know what the buyer paid for their last acquisition. You don’t know how urgently their fund needs to deploy capital. You don’t know whether your geography, your payer mix, or your caregiver retention metrics fill a gap that is worth a premium to them. And you do not know whether another buyer would value those same attributes even more. This isn’t a reflection on the seller. It is the nature of the situation. Buyers are professional dealmakers who do this every day. Most agency owners are selling for the first and only time. Even when both sides are acting in good faith, that is not an even playing field. Why “Knowing the Multiples” Can Work Against You An increasingly common pattern: an owner reads that home care companies are trading at a certain range of SDE or EBITDA multiples. A buyer calls and offers something within that range. The owner thinks that is within the benchmarks, so it is probably fair. But “within the range” and “what the market would actually bear for this specific agency” are not the same thing. A published range reflects the full spread of outcomes across deals of varying quality, size, and competitive dynamics. It does not tell you where your agency falls in that spread. And it does not tell you whether the right buyer, under competitive pressure, would go above the range entirely. The bigger risk is subtler. When an owner anchors to a number from a report, they stop asking whether more is possible. They evaluate the offer against the published range instead of against what the market would produce under competitive conditions. And once that frame of reference is set, it is very hard to undo. Worse, when an owner shares their expectations with a buyer, even casually, they create a ceiling. The buyer now has a target to negotiate around rather than a market to compete in. → Related: If a Buyer Approaches You Directly, a Competitive Process Will Almost Always Get You More Money Why This Matters More Now Than Five Years Ago The buyer landscape in home care has shifted considerably. Non-medical home care led M&A transaction volume for eight consecutive quarters through mid-2025, and the sector continues to attract significant private equity interest. New platform investments have created a wave of PE-backed buyers actively pursuing add-on acquisitions to build scale in key markets. Several forces are driving that demand. Aging demographics continue to increase the need for in-home services. Medicaid rate improvements in a number of states have strengthened margins for agencies with meaningful Medicaid exposure. And agencies with strong caregiver recruitment and retention programs are commanding particular attention from buyers who understand that workforce stability is one of the hardest assets to build from scratch. At the same time, agency owners are being contacted more frequently and from more directions than ever before. Private equity groups, strategic buyers, independent sponsors, search funds, even brokers prospecting for a listing. The volume of inbound interest can make an owner feel like they already have options. But receiving interest isn’t the same as creating competition. A competitive process takes that scattered interest and turns it into something actionable: multiple qualified buyers, on the same timeline, evaluating the same materials, with clear deadlines to submit their best terms. That structure is what changes behavior. → Related: Someone Wants to Buy Your Home Care Agency — Now What? What a Competitive Process Tells You About Your Own Agency Running a process doesn’t just produce a better price. It tells you things about your agency that you cannot learn any other way. A financial buyer building a home care platform will value your agency differently than a strategic buyer expanding into your geography. A buyer looking for Medicaid-heavy volume will see a very different opportunity than one focused on private-pay clients. An operator who values your caregiver training program and low turnover may see something that a generalist fund overlooks entirely. You cannot discover any of that by talking to one buyer. You discover it by putting the agency in front of a curated group of qualified acquirers and letting them show you what they see. The result isn’t just a higher number. It is a better understanding of where the real value in your agency lives, and that changes how you negotiate everything that follows. → Related: How to Sell Your Home Care Agency: 3 PE Exit Strategies What You Will Never Find Out Going Direct When a seller closes a direct deal, they walk away believing they got a good outcome. And they may have. But they will never know for sure, because they never tested it. They won’t know that the buyer who approached them was already prepared to bid significantly higher if there had been competition. They won’t know that a different buyer, one they had never heard of, would have valued their service area or their referral relationships at a meaningful premium. They won’t know that the deal structure they accepted was something the buyer would have improved considerably to win a competitive process. That is the real cost of going direct. It isn’t just what you leave on the table. It is that you never see the full table. You make the most consequential financial decision of your career with a fraction of the information you could have had. For most home care agency owners, 80 to 95 percent of their net worth is tied up in the business. That is not a decision that should come down to how one buyer happened to frame their opening offer. The Cost of Getting It Almost Right The hardest situation isn’t the owner who gets a bad offer and knows it. It is the owner who gets a reasonable one. An offer within the published range can feel like validation. It may even feel generous compared to what the owner expected. But if the market would have produced a significantly higher outcome under competitive conditions, that gap is not a rounding error. On a home care agency generating $2 to $3 million in adjusted earnings, even a modest difference in multiples translates to real, irreversible dollars. That is a different retirement. A different outcome for the family. And once the deal closes, there is no going back to test whether more was available. The information to make a better decision exists. It just does not show up in a Google search or a buyer’s opening phone call. It shows up when you put your agency in front of the right buyers, under the right conditions, with someone in your corner who has been through this before. → Related: 7 Common Challenges Home-Based Care Owners Face When Selling Their Agency Key Takeaways Published multiples tell you what category your agency falls into. They don’t tell you what a specific buyer will pay under competitive pressure. Buyers who approach you directly aren’t doing anything wrong. But they are negotiating with an information advantage you cannot close on your own. Receiving inbound interest isn’t the same as creating competition. Structure is what changes buyer behavior. A competitive process doesn’t just produce a better price. It reveals what different buyers see in your agency and how they value it differently. For most home care agency owners, the business represents 80 to 95 percent of their net worth. That is reason enough to let the market show you what it is willing to pay. For over twenty years, Mertz Taggart has advised home health, home care, and hospice owners on sell-side transactions. If you are weighing your options, whether a buyer has already reached out or you are just starting to think about what comes next, we are happy to have a confidential conversation. Request a confidential valuation → About the Author Cory Mertz, M&AMI, is a managing partner at Mertz Taggart, where he advises home health, home care, and hospice owners on selling their businesses. With over two decades in healthcare M&A and firsthand experience owning and operating a healthcare business, Cory brings a practitioner’s perspective to every engagement.

Why Exit Does Not (and Should Not) Mean Retirement Many people assume that when the subject of “exit” comes up with a business owner, we are discussing the owner’s retirement. This is not always true, and assuming it is true creates problems for owners, their companies, and their families. Exit does not have to mean retirement. Separating exit and retirement (and approaching them differently) makes for better exit planning, a smoother transition for the company, and happier life for the owner and his or her family. Here’s why. Business owners typically interact with their companies in three ways: Ownership – you own some or all of your company Involvement – you are engaged in your company’s activities, usually on a day-to-day basis Leadership – you are a leader within your company, typically the chief executive or similar level Put these three letters together and you get the word OIL. It’s helpful to remember this acronym because it can help owners better understand their personal exit goals and build flexibility into the exit planning process. The OIL Doesn’t Need to Flow Together In most situations, business owners think about and act as though their ownership of the company, their involvement within the company, and their leadership over the company are completely intertwined and inseparable. In other words, the OIL must always flow together. Owners often think this way because that’s how it’s been during their careers. Business ownership dominates their financial reality, they are fully involved in the company from a time and emotional standpoint, and they are clearly a leader over the company. However, the OIL does not need to flow together. You could sell some or all of your ownership of your company but remain fully Involved in the company and continue as the key leader. Or, you could keep your ownership of your company but hire a new CEO (or equivalent) to replace you as the company’s leader. Both examples demonstrate that you can pursue and implement different timelines for reducing or ending your ownership of the company, involvement in the company, and leadership over the company. Sure, sometimes at exit all three things end at once, but it does not have to be that way. You absolutely can “exit” your company but not retire. Overcome 3 Common Exit Planning Challenges All of this is significant because sometimes business owners get stuck in their “exit planning” if they think and act as though the OIL must always flow together. Here are three common exit planning challenges, and how thinking about OIL differently can lead to exit success: You want to sell some or all of your business to “take some chips off the table,” but you are worried about not knowing what you would do with yourself because you don’t want to retire. Well, we now know that you don’t have to retire. Consider targeting buyers who will acquire some or all of your company but want to keep you around and can offer exciting opportunities in the new organization. You want to sell your company to one or more employees, but you are worried about control — you must make sure the company performs well while buying you out. Well, we now know that you can continue to be involved in the company and remain the leader over the company while selling your ownership of the company. It’s possible for your ownership to decrease to nothing while you remain the chief leader of the company! (Ask us how to do this.) You want to pass your business down to one or more family members, but you don’t want to retire for now (and maybe never), nor do you want to give up control just yet (and maybe never). It’s possible to transfer some to all of your ownership to those family members without ever retiring (meaning without ending your involvement) and without giving up leadership unless and until you are ready. (Ask us how to do this.) Assuming that exit equals retirement creates roadblocks to exit success for the owner, his or her family, and his or her company. A better approach is to think about O, I, and L separately, and examine how unbundling these issues can create a better exit plan. -Mertz Taggart

The Simple Little Org Chart Can Produce Big Value at Your Exit Few business tools are as overlooked and underappreciated as the organizational (“org”) chart. Likely, you have diagramed one for your company. We tend to pull them out at specific moments such as when we need to meet with a third party like a vendor, customer, lender, or new hire. If out of date, which they often are, we quickly update them. Then, after the meeting, the chart gets put away, forgotten until the need arises to pull it out again. Most business owners stop there, having no further use for this unexciting little instrument. But hidden within the org chart is the potential to drive significant value in your company between now and exit. Here’s how. The Future Org Chart Exercise Convene your leadership team for an exercise called “The Future Org Chart.” Pick a future period of time such as three to five years out, and lead the team through the process of diagramming what the company org chart must look like on that date in order to support the expected growth between now and then. Choose a date that matches up with the growth plans and timetable defined in your company’s long-term strategic growth plan. Start with a completely blank sheet, and then discuss and fill in the organizational structure needed to realize and support this growth. Assign job titles (those are the boxes) and define reporting roles and relationships (those are the connecting lines), but do not assign current employees to the future org chart — not yet. You and your team will be tempted to start filling peoples’ names in the boxes, but it is important that you do not do this until you have a completed org chart that the entire team agrees with and supports. At this point, you now have a clear and written vision for the team that is required to grow and lead your company over the next three to five years. Meeting With Your Leaders There’s more to be gained. With the Future Org Chart template built, it is time to put names in the boxes. We recommend you meet individually and confidentially with your leaders to get their input because some of these conversations involve people’s careers: Some of your employees may have ambitions about climbing the organizational ladder and progressing into one of the higher positions forecasted in the Future Org Chart. Some employees may aspire to occupy a position currently occupied by another person. The Future Org Chart may call for adding new management layers into the company, and some employees may worry about being eclipsed or losing status if the level they currently occupy is subsidiary to a new level above it. Issues or opportunities uncovered by these one-on-one conversations have the potential to be good for both the team and the company. Leaders aspiring to do more and earn promotions can be trained and coached on what is necessary to achieve their goals, and any fears about growth can be addressed. By necessitating these conversations, the Future Org Chart helps you develop and grow your current team. Assigning Names After receiving input from your team members, now it’s time to finally put current employees’ names in the appropriate boxes within the Future Org Chart. Once done, you may see the following: Some newly created positions have empty boxes. This indicates that to create the team of the future, your company will need to identify and hire a person qualified to fill that need. Some existing positions that are currently occupied become empty between now and the Future Org Chart’s effective date. This reveals some succession planning that must take place, typically because the employee currently occupying that position is retiring sometime within the next few years. Some names are listed in multiple boxes. This indicates that you have some people doing too many things. You may need to find ways to add new talent into the picture to reduce the organizational dependency on any one person who is over-allocated. The most important person to be wary of here is yourself — as the business’s owner, you cannot remain directly involved in too many functions. If the company is overly dependent on you it will be difficult if not impossible to achieve a successful exit. Some names do not belong in any box. This might happen for a couple of reasons. Perhaps the employee is not in alignment with the rest of the organization, and this exercise is shining a light on that challenging reality. Alternatively, perhaps the direction and pace of the company’s growth will eventually eliminate the need for a person’s role and skills. In either situation, it is best to recognize these inconsistencies and develop a response rather than miss or overlook the issue. With this exercise complete, you now have a written picture of what the company’s team needs to look like in the future, as well as specific insights on what work needs to be done to make that future happen. The Future Org Chart exercise provides you with a road map for the company’s coaching, training, hiring, succession, and team development needs in order to realize the desired growth over the next several years. From there, you and your team can develop the plans and incremental steps required to migrate from the current organization to this organization of the future. Maximizing Company Value Having a solid plan for growth and the right team to achieve that plan would be reason enough to complete a Future Org chart, yet there is one final benefit for you to reap from this exercise. Building a competent team for the future that can deliver on this growth drives value in your company, which in turn supports achieving your exit goals: getting maximum value for the company, building a sustainable organization, and leaving on your own terms. All of this is from the simple, little, often-overlooked org chart.

If you’re an owner of a behavioral health company, chances are you are getting approached regularly, even daily, by private equity groups, strategic buyers, independent sponsors, and search funds, all eager to talk. Some may have suggested attractive “multiples” that they will pay for companies like yours. It sounds flattering, even tempting. You think, “I’ve got a willing buyer, let’s keep it simple and cut out the middleman.” Think again. We know how this might sound. Yes, we’re advisors — and yes, we benefit when sellers hire us. But stay with us. This isn’t a sales pitch. Whether you work with us or another experienced advisor or banker, this is about making sure you don’t leave millions on the table. Here’s why: 1. It’s Not Just About Finding Buyers – It’s About Finding Your Ideal Buyer In today’s market, especially in the behavioral health sector, there is no shortage of buyers. If you own a solid business, you’re most likely getting approached regularly. You may even be thinking, “I don’t need a banker; the buyers are coming to me.” But here’s the reality: finding a buyer is the easy part. Finding the right buyer, getting top-of-market terms, and protecting yourself through diligence, closing, and post-closing reconciliation — that’s the hard part. That’s where a competitive, advisor-led process delivers real, measurable value. 2. Good People – Even Better Negotiators Buyers may seem friendly. Most are genuinely high-integrity people. But don’t forget who they work for: investors. And their job is to get the best deal possible — for them, not for you. Private equity firms, in particular, are professional dealmakers. They do this every day. They know what levers to pull. They know how to frame their offer just right to make you feel like you’re winning, even when the deal is structured entirely in their favor. Meanwhile, most business owners are selling for the first (and only) time. That’s not an even playing field. 3. Even PE Firms Hire Bankers When They Sell — Why Don’t You? Here’s a telling fact: when private equity groups go to sell a portfolio company, they almost always go through a banker-led competitive process. Why? Because they know it’s the only way to: Maximize valuation and terms Maximize closing certainty Generate competitive tension among buyers Create backup options if the chosen buyer drags their feet or tries to renegotiate post-LOI If the pros won’t go to market without an advisor, why would you? 4. Where Many Sellers Slip: Naming Your Price First It often starts with a simple question from a buyer: “How much do you want for your company?” You give them a number. They come back with something just below that, maybe with some “stretch” language to make it feel generous. But look closer at the deal: There’s a seller note (you’re effectively financing the buyer) Payments are deferred (vs cash at close) There’s an earnout (you’re taking on all the post-close performance risk) You’re rolling equity, but you’re last to get paid from a liquidity event, and often at a diluted value It’s not just about the headline number — it’s about structure, terms, timing, and control. And most self-negotiated deals get structured in ways even the well-informed seller doesn’t fully understand until it’s too late. 5. “Fair” ≠ “Market” Buyers love to position their deals as “fair.” It sounds reasonable. It sounds cooperative. But in practice, it’s a subjective term – one that can make a deal seem better than it is. “Fair” is subjective. “Market” is real. And unless you’ve run a proper process and seen multiple offers, you don’t know what “market” is. That’s how buyers keep you in the dark — and get you to accept less than you could have achieved. 6. Premium Companies Get Premium Outcomes Strong, high-performing companies don’t just deserve “a good deal” — they often receive something better: a premium. We always give valuation guidance to our clients before going to market — informed by comps, investor sentiment, experience, and current deal trends. But we’re often pleasantly surprised by where the market actually takes the deal, especially with premium businesses. Why? Because when the right buyer meets the right opportunity at the right time, strategic motivation can drive valuations far above guidance. It’s not uncommon to see bidding wars erupt over highly differentiated companies — and those wars don’t happen without process, positioning, and pressure. If you’re running a great company, don’t settle for “reasonable.” There’s a good chance your business is worth more than you think — but only if you let the market tell you. 7. We’ve Seen This Movie Before — And Changed the Ending We’ve had multiple clients approach us after they’d already negotiated a letter of intent directly with a reputable, strategic buyer. They were ready to sign. Each time, we reviewed the deal. We saw opportunities to push back. To create leverage. To run a fast but focused market process, all while keeping the buyer interested and at bay. Each time, we got them a significantly better deal. In some cases, it was with the same buyer. In others, it was a new buyer altogether. Either way, just introducing competition changed everything — often adding millions to the final purchase price and dramatically improving the terms. Even the threat of competition made buyers step up. That’s how leverage works. 8. Think You’re Saving Money? Think Again. Some sellers avoid hiring an advisor because they think they’re saving money by going direct. Hiring a banker is not a cost. It’s an investment. And like any smart investment, it comes with a return — one that pays off at closing, in the form of a better price, better terms, and higher certainty of close. It’s a performance-based investment with virtually guaranteed, immediate ROI. 9. Better Odds of Closing. Better Terms at Close. Deals fall apart for all kinds of reasons — diligence issues, financing delays, buyer fatigue, retrades. But when sellers work with an experienced advisor who runs a real process, the odds of closing go up dramatically. And just as important, the odds of closing on the originally agreed terms go up too. Buyers are far less likely to drag their feet or re-cut a deal if they know there are other interested parties waiting in the wings. And they will not want to have a reputation in the behavioral health M&A world as less-than-honest dealmakers. You’ve Heard Our Perspective We’re not asking you to take it on faith — we’re asking you to look at the facts, the market, and what happens when real competition is introduced. Whether you work with us or not, make sure you’re not negotiating alone. The Bottom Line When a buyer approaches you directly, they’re doing what buyers do — trying to get the best possible deal for themselves. There’s nothing wrong with that. But it means the process will be tilted in their favor unless you change the dynamics. That’s what an advisor does. We reset the playing field. We bring the right buyers to the table, create competition, and ensure you’re in a position of strength throughout the process — not just at the LOI stage, but all the way through diligence and closing, and often even beyond. You’ve spent years building your business. When it’s time to sell, you deserve more than just a “reasonable” offer. You deserve a market-tested outcome that reflects the true strategic value of what you’ve built.