A home care M&A case study with Becky Reel, founder of For Papa’s Sake Home Care At a Glance Sector: Home Care  |  Deal Type: Sell-Side M&A   The Situation: Becky Reel built For Papa’s Sake Home Care in honor of her grandfather and grew it by 300% over a decade, earning the #1 agency ranking in North America from Home Care Pulse. She had promised her parents she would build the agency to the point where its sale could fund their retirement. The Challenge: Selling wasn’t just a financial decision. Becky was balancing the demands of running the agency, raising two young children, and navigating the emotional weight of letting go of a business that carried her family’s name and legacy. She needed an advisor who understood both the business and the personal stakes. The Mertz Taggart Approach: Senior advisor Bruce Vanderlaan led a hands-on engagement. He educated Becky through every stage of the process, attended every meeting in person, and evaluated buyers not just on price but on their alignment with the agency’s mission and values. The Outcome: Becky found a buyer who shared her commitment to patient care and staff well-being. Her promise to her parents was fulfilled. The agency’s legacy continues under new ownership. When Becky Reel decided to sell the home care agency she’d built in honor of her grandfather, she needed more than a broker. She needed a partner who understood what was at stake, for her family, her employees, and the patients who depended on her team. Becky chose Mertz Taggart. Below, she shares the story of selling For Papa’s Sake Home Care, from the promise that started it all to the moment she found the right buyer to carry it forward. Honoring a Promise and a Legacy For Papa’s Sake Home Care was born from a promise and a mission close to my heart. Named in honor of my grandfather, who I called Papa, who endured a tragic experience in a nursing home, the agency represented our commitment to create a better option for seniors—one rooted in dignity, safety, and genuine care. My promise to my parents was equally important: to build and grow the agency to a point where its sale could fund their fulfilling retirement.  Over my 10 years, we grew by 300%, was ranked the number 1 agency in North America by Home Care Pulse (now Activated Insights), and received the Leader of Excellence award for seven consecutive years. Selling this agency was not just about a transaction; it was about finding someone who would continue this legacy of care.   Balancing Family, Legacy, and the Demands of the Sale  The journey to sell was a long and intensive process. As a mother to two young children and a wife, I still had my day-to-day responsibilities: running the agency, being present with my family, and somehow balancing all this with the intense demands of the sale process. The emotional weight of parting with something so personal was heavy, compounded by the need to maintain the agency’s standards and focus on my family’s needs. Bruce , my advisor from Mertz Taggart, recognized this balancing act and stepped in as more than a business guide; he became my greatest advocate and support system. Empathy and Strategic Expertise  Bruce and the Mertz Taggart team brought a unique blend of empathy and strategic acumen to every aspect of the process. Bruce understood that selling our agency was not just about numbers—it was about preserving a legacy. His focus was not only on maximizing the agency’s value but also on finding a buyer who respected the values that built it. He guided me with skill and precision, making complex decisions easier and ensuring I felt confident at each step. Ongoing Support During Critical Moments One of the most telling moments was when a potential buyer arranged a meeting that could determine the future of the agency. The stakes felt high, and I was nervous about facing such a pivotal moment alone. Without hesitation, Bruce booked a flight the very next day to be by my side, offering both his strategic insights and his steadfast support. His presence turned what could have been an overwhelming experience into one where I felt empowered and reassured. Client-Centered for Every Step of the Journey Throughout the process, Bruce and Mertz Taggart never made me question their commitment to me and my goals. In moments of doubt and exhaustion—when the balance of family, agency responsibilities, and the emotional toll of the sale felt like too much—Bruce reminded me of the impact we had made and the legacy it would leave behind. His encouragement and compassion kept me grounded and helped me see the journey through to the end. A Partner Who Truly Cares Selling For Papa’s Sake Home Care was one of the most significant and emotional decisions of my life. Bruce’s empathy, dedication, and strategic guidance made it possible to honor my promise to my parents while ensuring the agency’s legacy would continue. For anyone considering the sale of a home care agency they’ve poured heart and soul into, Mertz Taggart is more than an M&A firm—they are partners who truly care about their clients’ well-being and success. We are delighted to have received this incredibly in-depth testimonial from our client, Becky Reel . Becky’s story reflects what drives our work at Mertz Taggart: helping healthcare owners navigate the most consequential decision of their professional lives with the guidance, honesty, and advocacy they deserve. Every engagement is personal. Every outcome matters. Considering a Sale of Your Home Care Agency? Whether you’re years away or actively exploring your options, every conversation with Mertz Taggart is confidential. We’re here when you’re ready. Contact us: info@mertztaggart.com | 770.888.1171 Read more stories from our clients on our Testimonials page › Learn about our approach to home care M&A › Follow us on LinkedIn for daily insights ›

By Cory Mertz, Managing Partner — Mertz Taggart   |  Updated March 2026 Executive Summary:  Home-based care agency owners who may sell in the future can learn a lot from private equity firms. Three of the most useful lessons are to plan your exit early, track the right KPIs, and run a competitive sale process with professional guidance. These steps can help owners improve value, prepare more intentionally, and increase the likelihood of a stronger outcome when it is time to sell. If you own a home-based care agency and think you may sell your business someday, there is value in studying the people who do this for a living: private equity firms . Private equity firms (PE firms) acquire, grow, and exit businesses with one goal in mind: maximizing value. They are experienced at identifying what makes a company more attractive to buyers, improving performance over time, and preparing for a successful exit. That does not mean home-based care agency owners should operate like private equity investors. But it does mean there are a few practical habits worth borrowing. Here are three strategies agency owners can take from private equity firms when preparing for an eventual sale. 1. Plan your exit early One of the clearest lessons from private equity is this: they do not wait until the last minute to think about an exit. PE firms usually plan their exit strategy before they even close on purchasing a platform company, or as soon as possible after acquiring it. They think early about likely buyers, key value drivers, timing, and what the business will need to show in order to be attractive in the market. They also align business strategy and performance improvement efforts with that exit plan. As one private equity executive said at a recent conference, “We make our money when we sell, not when we buy.” In some cases, private equity firms will even overpay for an initial platform acquisition just to establish a foothold in the industry. What this means for agency owners: The best exits aren’t rushed, they’re the result of intentional preparation. Early exit planning can help you make better decisions long before you go to market. Your exit plan doesn’t need to be a 50-page document. Start with three things: your target sale price,  your ideal buyer type (strategic acquirer or PE firm),  and a realistic timeline. Then revisit it quarterly. Adjust as your business grows, as the market shifts, and as your personal goals evolve. Planning early gives you time to address the things that could otherwise reduce your value at closing, things like owner-dependence, client concentration, or financials that need organizing. It also gives you the freedom to sell on your own timeline, when you’re ready, on your terms. → Mertz Taggart’s Value Accelerator Program  helps agency owners build a roadmap to maximize value before going to market. 2. Be serious about KPIs PE firms are meticulous about metrics. They track KPIs not just to manage performance, but to build a compelling story for the next buyer. If you want to sell your agency at top-of-market value, understanding which numbers matter most gives you a real advantage. What this means for agency owners: Buyers are looking for agencies with predictable, recurring cash flow and low owner-dependence. The right KPIs can help you improve current performance while also making your business more attractive when the time comes to sell. Don’t just track these numbers; trend them over time . Clean financials and clear KPI dashboards signal operational maturity. They also give confidence in negotiations because we can show exactly what the business is worth and why. If you’re not sure which metrics matter most for your specific agency type, that’s worth a conversation with an advisor who specializes in healthcare M&A. The KPIs that drive valuation in home health may be different from hospice, or from behavioral health. 3. Run a banker-led competitive auction process when you sell We’ll be upfront: as M&A advisors, we have a perspective here. But we’ve also seen firsthand how much the process matters to the outcome. Private equity firms usually do not sell their businesses quietly to a single buyer without competition. Instead, they usually hire investment bankers to run a structured, competitive auction process. The reason is straightforward: when multiple qualified buyers are at the table, the seller gets better pricing, better terms, and more control over the process. A competitive auction process involves: preparing professional marketing materials,  identifying and qualifying the right buyers,  managing confidentiality,  soliciting multiple offers,  and negotiating not just price but the full deal structure including working capital targets, representations, and post-close transition terms. What this means for agency owners: Healthcare M&A has unique dynamics, and sector experience matters. An advisor who knows what buyers in this market look for, how they value agencies, and where issues tend to surface can position the business more credibly, anticipate concerns early, and run a process that is built to drive the strongest outcome. A well-run process with multiple qualified buyers also creates healthy momentum. Buyers who know others are interested tend to move more decisively, put forward stronger offers, and stay committed through due diligence. → See how Mertz Taggart has helped agency owners achieve successful exits on our Transactions  page. The Bottom Line: Your Agency Deserves a Thoughtful Exit Selling your home care agency is about more than a number. It’s about protecting the team you’ve built, the patients you serve, and the legacy you’ve created. It can also be one of the most financially rewarding decisions of your career, if you approach it with the same discipline that the professionals use. Plan early. Know your numbers. Surround yourself with the right people. These are the same principles PE firms rely on, and they’re at the heart of every successful exit we’ve had the privilege of being part of. Considering an exit? Mertz Taggart offers confidential, no-obligation consultations for home care, home health, hospice, and behavioral health agency owners. Start a conversation →

Insights from Mertz Taggart’s Capital + Strategy panel on closing deals in home health, home care, and hospice M&A By Bruce Vanderlaan, Managing Director, Mertz Taggart Executive Summary Selling a home-based care agency involves more than finding a buyer and agreeing on price.  In this panel discussion, experts shared practical lessons from real transactions, including why preparation, trust, clean financials, and experienced advisors can make the difference between a smooth closing and a difficult one. For agency owners thinking about an eventual exit, the message was clear: the deals that go well usually involve sellers who prepare early, stay engaged, and address common issues before they become deal problems. The panel identified seven common challenges agency owners face when selling:  the time commitment of the M&A process, the emotional weight of letting go, the critical role of trust between buyers and sellers, the impact of clean financials on valuation, working capital disputes, labor and compliance risks, and the importance of choosing advisors who specialize in healthcare transactions Selling a home-based care agency is not just a financial event. It is also an operational and emotional process that can surface issues many owners do not fully anticipate. That was one of the clearest takeaways from Mertz Taggart’s April 10, 2025 Capital + Strategy panel, “Closing the Deal: Overcoming Common Challenges in Home-Based Care M&A.”  The discussion featured Bruce Vanderlaan of Mertz Taggart, Cameron Cordts of PurposeCare, and Mike Trigilio of HouseWorks, who brought deep, firsthand experience from transactions across the home-based care spectrum. For agency owners wondering how to sell a home-based care agency, or how to prepare for a smoother exit, the conversation offered a practical reminder: the sellers who tend to have the best outcomes are the ones who prepare early, stay engaged, and work with experienced advisors throughout the process. Selling your Home-Based Care Agency is a Full-Time Job The M&A process demands far more time and attention than most agency owners expect. Running your business while managing a sale requires serious bandwidth. Bruce Vanderlaan opened the discussion by stressing the intensity of the process: selling an agency is not something you do on nights and weekends. It is another full-time job on top of running your business. Cameron Cordts added that PurposeCare structures due diligence around weekly milestones, giving sellers a clear sense of what to expect and when, which helps keep the process moving without becoming overwhelming. What Role Does Emotion Play in Home Care M&A Transactions? Sellers consistently underestimate the emotional weight of the decision. Whether you’re just starting to ask “How do I sell my home health agency?” or you’re deep in discussions, the personal side matters. The decision to sell is rarely a single moment. It’s a slow accumulation. For some owners, it’s triggered by mounting strain—regulatory fatigue, reimbursement uncertainty, staffing challenges, burnout. For others, it’s a deliberate choice: they’ve hit a financial target, the business is structured to transact, and they’re ready. But either way, the emotional weight is real. “It’s not uncommon to see tears at the closing table. These businesses are personal legacies.”  — Bruce Vanderlaan, Mertz Taggart Mike Trigilio, who has led and sold multiple businesses, agreed. Even institutional sellers get emotionally invested. Letting go is never as easy as it looks on a spreadsheet. Why Is Trust a Must for Healthcare M&A Success? One of the biggest hidden challenges is a seller’s hesitation to share information, often driven by a lack of trust. Building credibility early in the process makes a measurable difference. Many agency owners enter the process with very little familiarity of advisory firms, valuation concepts, or how M&A works. They typically didn’t start their business to sell it. They know home health. They know hospice. They don’t know the advisory landscape. That means trust has to be built, through education, through showing up, through discretion. Bruce Vanderlaan emphasized that a major part of Mertz Taggart’s role is connecting sellers with vetted, reputable buyers. That credibility can make a meaningful difference in how a process unfolds. To reinforce transparency, Cameron shared that PurposeCare introduces sellers to its local leadership team early. That helps provide peace of mind about the future of the business after closing. Financial Records Affect the Valuation of your Home Care Business Accurate, well-documented financials directly influence how buyers approach valuation and their confidence in the deal. Messy books are one of the most common deal risks. Your financials tell a story. If that story is messy (personal expenses mixed in, inconsistent records) buyers notice. And it costs you. Bruce recounted deals where large personal expenses were mixed into business records. If buyers cannot separate the owner’s lifestyle from the agency’s actual performance, it impacts perceived value. The takeaway was clear: well-documented financials are not just helpful. They are foundational to a credible offer. What Is the Working Capital Dispute in Home Health Agency Sales? Working capital is a common sticking point in nearly every home-based care transaction. Both sides have legitimate concerns, and resolving them requires clear communication. “Sellers feel like they’re giving up their hard-earned receivables. Buyers just want to avoid funding payroll on Day One.”  — Cameron Cordts, PurposeCare Bruce likened it to selling a car: the seller wants to hand it off with an empty tank, while the buyer wants it full. The advisor’s job is to agree on how full it needs to be. Labor and Compliance Issues Can be Deal-Killers Wage and hour violations, improper worker classification, or missing documentation can create last-minute complications that threaten a transaction. Mike explained that he has never been through a deal where something did not come up. The key is to find it early and manage the risk. The panelists were aligned on this point: these issues are common, but they become much more manageable when addressed before they threaten the transaction. Why Does Your Advisory Team Matter When Selling a Home Health Agency? The quality of your advisory team (attorney, accountant, and M&A advisor) has a direct impact on whether a deal closes smoothly or stalls. Bruce warned that if your attorney does not specialize in transactions, or your accountant is not responsive, the entire deal can suffer. Cameron and Mike agreed that smoother deals tend to happen when sellers are supported by advisors who understand healthcare and know how to manage the M&A process. As Bruce summed it up: “The deals that succeed are the ones where the seller is prepared, the advisory team is aligned, and there’s mutual trust between both sides. That’s when everything starts to click.” Key Takeaways for Agency Owners Considering a Sale ✓ Selling a home health or home care agency is a full-time commitment on top of running your business. Start preparing early. ✓ The emotional weight of selling a personal legacy is real. Acknowledge it and plan for it. ✓ Trust between buyers and sellers is the foundation of a smooth transaction. Work with advisors who build that credibility. ✓ Clean, well-documented financials directly affect the valuation of your home care business. ✓ Working capital disputes are common but manageable with the right guidance. ✓ Labor and compliance issues should be identified and addressed early—before they become deal-killers. ✓ Your advisory team matters. Choose professionals who specialize in healthcare M&A. Ready to Explore Your Options? If you’re asking yourself “How do I sell my home health agency?” or want to better understand the valuation of your home care business, the best next step is a confidential conversation with an experienced M&A advisor. At Mertz Taggart, we specialize in helping home-based care providers navigate the complexities of selling, from valuation to deal structure. We guide you every step of the way. Schedule a confidential consultation today. Contact Us   |  770-888-1171 |  www.mertztaggart.com

By Cory Mertz, Managing Partner — Mertz Taggart   |  Updated March 2026 Executive Summary: Owners of home health, hospice, and home care agencies are often approached by buyers before they are actively planning a sale. While those inquiries can be useful, they should be handled carefully.  A buyer-led conversation rarely produces the best possible outcome for the seller. Agency owners should prepare before responding, understand how professional buyers approach acquisitions, and consider working with an experienced healthcare M&A advisory firm if they are seriously considering a sale now or in the future. If you own a home health, home care, or hospice agency, you already know the feeling. The emails. The LinkedIn messages. The phone calls from people you’ve never met, saying they want to buy your company. It’s flattering. It’s a little overwhelming. And if you’re at a point in your career where you’ve thought about what’s next, it can be tempting to engage. But here’s what most agency owners don’t realize: an unsolicited offer isn’t really an offer.  It’s an opening move.  The buyer doesn’t know your financials, your payer mix, your retention numbers, or what makes your agency special. If they’re quoting a “multiple of X” or telling you they paid “Y for a company just like yours,” they’re working with assumptions, not information. When a buyer contacts you about purchasing your home care agency, don’t ignore the inquiry, but don’t rush into it either. Take time to research the buyer, understand your agency’s true value, and consider engaging a healthcare M&A advisor who can help you evaluate whether it’s the right time and the right opportunity. That doesn’t mean you should ignore these inquiries. They can actually be useful. But how you respond matters a great deal. Here’s how to approach it thoughtfully. How Should You Respond to an Unsolicited Offer for Your Agency? The most important thing is not to rush.   You don’t need to respond the same day, and you certainly don’t need to share any confidential information in an initial conversation. Before you reply, take a few steps to understand who you’re dealing with.   Look at their LinkedIn profile and company website. If it’s a buyer (not a broker), check whether they’ve completed previous acquisitions in home care, hospice, or home health. If the identity of the buyer is vague or hard to verify, that’s a reason to proceed carefully. If someone claims to be a broker representing a buyer, a credible one will share the buyer’s name early in the conversation and be clear about who’s paying their fee. Be cautious of brokers who initially claim to have a buyer, then pivot to pitching themselves as your sell-side representative. When you do respond, keep it simple.   Ask how they plan to finance the acquisition and what drew them to your agency specifically. A serious buyer will have clear answers. Then let them know you’ll want to consult with an advisor before moving forward. Any credible buyer or investor will respect that, and in fact, most of them appreciate having a professional intermediary in the process because it sets clear expectations on both sides. Should You Sell Your Home Care Agency to the First Buyer Who Reaches Out? We understand the appeal. When someone puts a number on the table, especially if it sounds reasonable, it’s natural to want to explore it.  But in our experience, negotiating with a single buyer almost always results in a lower price and less favorable terms than a structured process with multiple qualified parties. Think about it from the buyer’s perspective. If they know they’re the only one at the table, there’s no urgency to put forward their strongest offer. They can take their time, ask for more concessions, and renegotiate after due diligence. When there are multiple interested parties, the dynamic changes. Buyers who know others are interested tend to move more decisively and submit more competitive terms. This is exactly how private equity firms handle every one of their exits. They hire an investment bank or M&A advisory firm to run a competitive process with a curated group of qualified buyers and investors. They believe, and we’ve seen it confirmed over and over, that this is the most reliable path to the best possible outcome for the seller. → Related: How to Sell Your Home Care Agency: 3 Exit Strategies from Private Equity What Makes a Buyer “Qualified” to Acquire a Home Care Agency? Not every buyer who reaches out is the ideal buyer for your agency.  Whether you’re working with an advisor or evaluating interest on your own, it helps to understand what separates serious acquirers from casual shoppers. A qualified buyer generally meets three criteria: They have the financial resources to complete the transaction, including access to sufficient cash or a committed fund. A professional buyer won’t hesitate to share this information with you or your advisor.  They understand the home-based care industry. Strategic buyers will naturally have this knowledge, but if you’re speaking with a financial buyer or PE firm, you want to make sure they’re well-educated on the sector before you invest time in the process.  They have meaningful transaction experience. Most serious strategic acquirers have dedicated M&A teams. Smaller or newer buyers may struggle to execute efficiently, which can extend timelines and introduce risk. Building an “A-list” of buyers who meet all three of these criteria is one of the most valuable things an M&A advisor does. It’s also one of the hardest to do on your own, because it requires knowing who’s actively acquiring, what they’re looking for, and how to approach them confidentially. Why Does Confidentiality Matter When Selling a Home Care Agency? This is something that weighs heavily on owners, and rightly so. If word gets out that you’re exploring a sale, it can unsettle your employees, your referral sources, and even your patients. In some cases, it can disrupt the sale itself. An experienced healthcare M&A firm protects confidentiality by controlling what is shared, with whom, and when. The right information is shared with the right buyer at the right time, so you can create interest without exposing details too early or disrupting the business. This is one of the key reasons we encourage owners not  to engage deeply with unsolicited buyers on their own. One conversation with the wrong person, at the wrong time, can create problems that are difficult to walk back. What Does a Healthcare M&A Advisor Actually Do? One of the main benefits of working with a healthcare M&A advisory firm is that it lets you stay focused on what you do best, running your agency, while your representatives handle the details of the transaction. A good advisor takes the time-intensive work off your plate:  preparing and updating the financial data book and Confidential Information Memorandum,  curating the buyer list,  running the competitive bid process,  coordinating with attorneys and accountants,  and addressing potential roadblocks before they become deal-breakers.  They also bring perspective on what’s considered “market” for both value and terms, so you can negotiate from a position of knowledge rather than guesswork. For home health, home care, and hospice owners, working with an advisor who specializes in healthcare M&A is especially important. A healthcare-focused advisor understands how buyers in this space evaluate agencies, what they are willing to pay for, and how to position the business credibly in the market. They can also spot issues early, help resolve them before going to market, and bring added credibility with buyers because they understand the industry and can speak their language. → See how Mertz Taggart has guided agency owners through successful transactions on our Transactions  page. It’s Never Too Early to Understand Your Options Receiving an inquiry about your agency can be the start of an important conversation, even if you’re not ready to sell today.  The best way to respond from a position of strength is to understand what your agency is worth, what the current market looks like, and what a well-run process can deliver. For most home care owners, 80–95% of their net worth is tied up in their business. That’s reason enough to treat the sale like the significant financial event it is, with the right preparation, the right team, and the right process behind you. Curious about what your agency is worth? Mertz Taggart provides confidential, complimentary valuations for home health, home care, and hospice agency owners. Whether you’re considering a sale now or just want to understand your options, we’re happy to have the 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 nearly two decades in healthcare M&A and more than 160 completed transactions across the firm, Cory brings firsthand experience to every conversation.

By Cory Mertz, Managing Partner — Mertz Taggart   |  Updated March 2026 If you’ve decided to explore selling your home health, home care, or hospice agency, one of the first, and most important, decisions you’ll make is who to work with. There are a lot of firms reaching out to agency owners right now. Some are well-established advisory firms with deep healthcare experience. Others are generalist brokers. Some are newer entrants still building their track records. And increasingly, buyers themselves are reaching out directly, hoping to start a conversation before you’ve engaged any representation at all. Here's something we believe strongly: finding a  buyer for your agency is the relatively easy part. There's no shortage of active buyers in home-based care right now, and most of them are personable, credible operators. But here's the question that matters more: how do you know which buyer is the ideal  buyer for you and your agency? That's where the process makes the difference. What separates a good outcome from a great one is having an advisor who can run a confidential, competitive process that surfaces the right buyers, maximizes your value, navigates diligence, and gets you to a closing with few surprises. That takes a particular kind of firm. Executive Summary: When choosing an M&A advisor to sell your home care agency, evaluate six things:  their credibility with active buyers, their ability to run a confidential competitive process, their track record in healthcare transactions, their willingness to be candid about valuation, their communication and negotiation skills, and their depth of knowledge in the home-based care industry. 1. Does the Firm Have Credibility with the Buyer Community? This is one of the most overlooked factors, and one of the most important. The firm representing you needs to have earned the respect of the buyers and investors who are active in home-based care M&A. That credibility directly affects how buyers respond to the marketing materials, how they view the financial adjustments your advisor presents, and how negotiations unfold. Buyers respond well to firms they know, firms that have a reputation for thorough preparation and honest advocacy. When a respected advisory firm brings a deal to market, buyers take it seriously from the start. They know the process will be well-run, the information will be credible, and the advisor will hold them accountable throughout.  You can get a feel for this by asking about the firm’s experience with active buyers in the space, the kinds of transactions they’ve recently brought to market, and how they position clients with sophisticated buyers. A strong advisor should be able to answer those questions clearly and confidently. 2. How Will the Firm Protect Confidentiality? Confidentiality is one of the biggest concerns owners have when considering a sale, and for good reason. If word gets out prematurely, it can unsettle your employees, your referral sources, and your patients. Ask your prospective advisor how they handle confidentiality at each stage:  How do you curate your target buyer or investor list? Will your agency be listed publicly, or is the outreach targeted and discreet? Some firms rely on online listings or broad-market blasts that can give competitors and local agencies clues about your intentions. A thoughtful advisor tailors the process to your situation, reaching the right buyers without exposing your business to unnecessary risk. Every transaction is different, and a good advisor will customize their approach based on your specific goals, your local market, and your timeline. 3. What Is the Firm’s Track Record in Healthcare M&A? Experience matters, but the kind of experience matters even more. You want a firm that has completed meaningful transactions in the home-based care space specifically, not just healthcare broadly, and not just a handful of deals. Ask about the number and types of transactions they’ve closed. Look for evidence that they’ve worked with agencies similar to yours. Client testimonials and case studies can give you a sense of how the firm handled the complexities that come with healthcare deals. A firm with a strong track record in your sector will also know the active buyer landscape well, including who’s acquiring, what they’re looking for, and what terms are realistic in the current market. → See examples of completed transactions on our Transactions  page. 4. Will the Firm Be Candid with You About Valuation? This one is worth paying close attention to. When you’re evaluating advisors, you’ll likely get a sense of what they think your agency is worth. Be cautious of any firm that leads with an unusually high valuation, especially before they’ve done any real analysis. An inflated number can feel good in the moment, but it’s often a tactic to win the engagement rather than an honest assessment of what the market will bear. Most advisory engagements include a one-year term, plus a tail period of 18–24 months covering any buyers the firm introduced during the engagement. That’s a meaningful commitment. You want to make sure you’re entering it with a firm that’s being straight with you, not one that overpromised to get your signature. The right advisor will let the market determine value through a well-run competitive process, and they’ll help you understand the range of likely outcomes based on real data and current M&A marketplace. 5. How Will the Firm Communicate and Negotiate on Your Behalf? Selling a home care agency is a complex process with a lot of moving parts: attorneys, accountants, due diligence teams, and multiple buyer conversations happening simultaneously. Your advisor is the person managing all of it on your behalf. Their ability to communicate clearly, keep you informed without overwhelming you, and advocate for your interests in negotiations is what separates a good experience from a stressful one. During your initial conversations with an advisor, pay attention to how they communicate with you:  Are they responsive?  Do they explain things in plain language?  Do they listen to what matters to you, or do they default to a one-size-fits-all pitch?  The way a firm treats you before they have the engagement is usually a good indicator of how they’ll treat you after. On the negotiation side, look for a firm that’s comfortable holding firm when it matters, on price, on deal terms, on timeline, while maintaining constructive relationships with the other side. The best outcomes happen when your advisor earns both your confidence and the buyer’s respect. 6. Does the Firm Truly Understand the Home-Based Care Industry? Healthcare M&A is not the same as selling any other business. Home health, home care, and hospice agencies operate in a world of state licensing, Medicare certification, Medicaid reimbursement, and clinical compliance requirements that directly affect valuation and deal structure. An advisor who doesn’t understand these dynamics can miss things that cost you real value. Industry expertise also means knowing how buyers in this space think and operate. Strategic acquirers (larger home care companies building regional scale) evaluate deals differently than PE firms assembling healthcare platforms. A knowledgeable advisor can position your agency in a way that resonates with both buyer types and highlights the specific value drivers that matter in your sector. Ask your prospective advisor about the subsectors they’ve worked in and how they stay current on market trends. An advisor who publishes original research, speaks at industry conferences, and engages with the home-based care community is more likely to bring the depth of insight you need. Choosing Well Is Worth the Time Deciding to sell your agency is often the biggest decision of an owner’s career. For most home care owners, the business represents not only their livelihood but also their life’s work, their team, and their reputation in the community. The firm you choose to represent you will shape every part of the experience, from the initial valuation guidance through closing and beyond. Take the time to ask the right questions. Talk to more than one firm. Pay attention to how they make you feel, not just what they promise. And remember: the goal isn’t just to find someone who can sell your agency. It’s to find someone who will protect your interests, maximize your value, and help you feel confident through every step of the process. Want to learn more about how we work? We’re happy to walk you through our process, answer your questions, and help you understand your options — with no pressure and no obligation. Start a confidential conversation →   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 nearly two decades in healthcare M&A and more than 160 completed transactions across the firm, Cory brings firsthand experience to every conversation.

Mertz Taggart Home Health, Home Care & Hospice M&A Update for Q3 2021 With both the height of the COVID-19 pandemic and the start of the Patient-Driven Groupings Model (PDGM) now in the rearview mirror, in-home care buyers and motivated sellers are finding it easier to come together on deals. There were 44 total home health, hospice and home care transactions completed in the third quarter of 2021, up from the 41 deals that took place in the previous quarter. Over the past three years, the only quarter with more transactions was 2020 Q4. “All three sub-industries remain strong, but the increased activity has little to do with increased demand,” Mertz Taggart Managing Partner Cory Mertz says. “Demand has been strong for several quarters and continues. This is a supply-driven market.” Note: Total industry transactions does not necessarily equal the sum of the sub-industries, as many transactions include more than one sub-industry. There are a few main factors helping drive supply in the back half of 2021. For starters, there’s the likely increase in the capital gains tax rate. When put in effect, it will diminish a prospective seller’s return or force them to place a bigger price tag on their business, in turn limiting buyer interest. What remains unknown is when this hike will go into effect, and its severity. “The Biden administration came out of the gate with some pretty draconian targets,” Mertz says. “The current “Build Back Better” reconciliation package is still in negotiations, but it appears to be much less severe than the original targets.” However, he adds, it’s quite possible that the effective date is already in the rearview mirror, with the current package delayed in congress. In addition to a capital-gains tax increase , the COVID-19 pandemic is nearly entering its second year, bringing sustained operational difficulties. “We’ve heard from many owners who are feeling a sense of burnout,” Mertz says. “Maybe they were already thinking about a sale in the next couple of years, but then the ongoing pandemic just accelerated their timelines.” Looking ahead, home health supply may be bolstered even further by the proposed Home Health Value-Based Purchasing (HHVBP) Model expansion as well. Franchise deals headline home care M&A activity There were at least 18 home care-related transactions in Q3 2021, according to Mertz Taggart data. That was on par with the previous quarter, which registered 19 home care deals. One of the splashiest home care transactions in the third quarter was Honor’s acquisition of Home Instead Senior Care . Combined, the Honor-Home Instead enterprise represents more than $2.1 billion in home care services revenue, according to the companies. Private equity group Searchlight Capital Partners also acquired a majority stake in Care Advantage in the third quarter. Care Advantage offers a variety of in-home care services to patients across Virginia, Maryland, Washington, D.C., and Delaware. ModivCare Inc . (NYSE: MODV) closed on a $340 million purchase of CareFinders Total Care early on in Q3, advancing the publicly traded company’s plan to become one of the largest personal care services providers in the country. ModivCare purchased Simplura Health Group in September 2020. A key theme to the home care M&A landscape throughout this year has been lots of activity around franchisors. “The third quarter saw another franchisor acquired in Home Instead” Mertz says. “That brings the total number of franchisors who have sold in 2021 to three, compared to just three in the previous five years. Franchisors give financial buyers both immediate scale, which can be leveraged, and the ability to quickly grow EBITDA via acquisition of both existing franchisees and independents. This is a model that has been proven by other PE groups.” Home health transactions up The home health sub-sector saw a noticeable spike in dealmaking. Mertz Taggart tracked at least 16 home health-related deals in Q3 2021, on par with Q2. Home health M&A activity is likely to remain robust moving into 2022, especially if the U.S. Centers for Medicare & Medicaid Services (CMS) finalizes its plan to expand HHVBP to all 50 states. “As part of its basic framework, the HHVBP proposal exposes home health agencies to a 5% upward or downward payment adjustment,” Mertz says. “Agencies that perform well can take any bonus payments and reinvest in the business or in M&A. Those who don't perform well effectively pay a penalty to those who do." LHC Group Inc. (Nasdaq: LHCG) made a flurry of deals in August, including the purchase of Alexandria, Virginia-based Cavalier Healthcare Services . Strategically, the acquisition opens up a new service area for LHC Group, allowing it to better leverage its operations in the Washington, D.C., and Maryland markets. Mertz Taggart provided exclusive transaction advisory services in this transaction, representing the seller. In July, the Visiting Nurse Association (VNA) — a nonprofit provider in Omaha, Nebraska, and Council Bluffs, Iowa — sold its home health and hospice operations to Amedisys Inc. (Nasdaq; AMED). Under the terms of the transaction, VNA’s home health and hospice services rebranded to “Amedisys Home Health” and “AseraCare Hospice, an Amedisys Company,” respectively. Mertz Taggart provided buyside advisory services to Amedisys in this transaction. The biggest home health-related deal in Q3 2021 also came from LHC Group. In September, the company announced it was acquiring 23 home health locations, 11 hospice agencies and 13 therapy businesses from Brookdale Senior Living Inc . (NYSE: BKD) and HCA Healthcare (NYSE: HCA). The transaction represented annualized revenue of about $146 million, according to the company. Hospice dealmaking takes another leap There were at least 23 hospice-related deals in Q3 2021, up from 17 transactions in Q2. Since the start of 2018, no quarter has seen more hospice M&A activity apart from the fourth quarter of last year, which tallied 29 hospice-related transactions. The pure-play hospice transactions in Q3 included Agape Care’s purchase of Integrity Hospice-Dubin , in addition to Charter Healthcare Group’s acquisition of Generations Hospice Care. “Humana Inc. (NYSE: HUM) additionally completed its $8.1 billion acquisition of Kindred at Home in this previous quarter,” Mertz says. “That’s a deal to keep an eye on from a hospice perspective, as Humana has discussed plans to separate Kindred’s hospice operations.” Entering the final stretch Of the 44 home health, hospice and home care transactions in Q3 2021, private equity buyers and their portfolio companies led the way with 25 deals. Public companies like LHC Group, Amedisys and others took part in at least 16 transactions. “We predicted a very strong finish to an already-strong year,” Mertz says. “The third quarter did not disappoint.”

A steady second half of 2020 bodes well for 2021. Behavioral health M&A remained steadily active in the fourth quarter of 2020, with a total of 27 transactions, according to the latest data from M&A advisory firm Mertz Taggart. Announcements in addiction treatment led the segment in Q4 with some large groups moving forward on multiple acquisition deals. The year finished with 97 transactions overall. 2020’s total number of deals were comparable to those in the previous two years, despite a global pandemic. In 2019, the segment witnessed 97 announcements, and in 2018 an even 100. “The second half of 2020 was as strong as we’ve seen ,” said Mertz Taggart Managing Partner Kevin Taggart. “ Combine that with the threat of a near-term capital gains tax hike, and we expect an active 2021.” He said new partnerships and access to capital will become especially important in the months to come as healthcare providers emerge from the coronavirus pandemic with a more competitive landscape than before. “We know that financial mechanisms have been shifting,” Taggart said. “While loans and operating income remain the primary sources of capital, private equity investment could be the important variable that contributes to a more optimistic outlook for many behavioral health providers.” Taggart believes the continued infusion of private equity assets combined with a clear forecast of pent-up demand for services will offer a boost to revenue by mid-year. Yet, providers that are able to build capacity quickly will also need to be resourceful in how they approach the imbalance of supply and demand, leveraging technology and strong operational sophistication. “We see additional evidence of a positive outlook in behavioral health based on the number of new center openings across the country,” Taggart continued. “And these are brick-and-mortar locations, banking on an increase in in-person services, even as they continue to rely on telehealth visits.” With an anticipated surge in demand, new center openings and private equity interest, Taggart believes M&A activity could reach a new peak in mid-to-late 2021. The last three years have demonstrated that there’s still plenty of room for strategic acquisitions in behavioral health. Note: The sum of sub-industries (broken down above) does not always equal total sector deal volume, as some transactions include more than one sub-industry. Addiction Treatment In Q4, the deal activity continued for several growing PE-backed portfolio companies. As they add new locations, many are also launching rebranding efforts to unite their networks in name as well as in operations. A recent survey from the National Association of Addiction Treatment Providers noted that providers are making significant investments in technology, which will likely set them up for more objective quality-of-care measurement, which also leads to improved reimbursement from payers. “Buyers are definitely not looking to add scale for the sake of scale,” said Taggart. “Proven clinical quality and the ability to increase census has to be part of the growth strategy.” It was a busy quarter for BayMark Health Services with a number of significant deals. The addiction treatment organization acquired Liberty Bay Recovery Center , a residential treatment center in Portland, Maine, making it the second residential offering in the BayMark network of more than 250 facilities across the United States and Canada. Mertz Taggart represented Liberty Bay in the transaction . BayMark also announced the acquisition of Limestone Health , an opioid treatment program with three locations in Indiana, formerly owned by Springstone, Inc. The transaction represents BayMark’s first entry into the state. In December, it acquired Choices of Louisiana , which offers opioid treatment programs in three locations, and additionally in a separate transaction, it added Recovery Pathways , an office-based opioid treatment provider with three locations in Pennsylvania, to its roster. Also in December, BayMark acquired Echo Treatment Center in Pennsylvania, which will fall under the MedMark Treatment Centers brand. BayMark is a portfolio company of Webster Equity Partners. Summit BHC has acquired Seabrook in New Jersey, adding a 153-bed inpatient center and three outpatient centers to its portfolio. The deal marks Summit’s first entry into New Jersey and brings the company’s total number of locations to 22. Mertz Taggart provided sell-side services for Seabrook in the transaction. Landmark Recovery acquired Las Vegas Recovery Centers in December . Mertz Taggart provided sell-side services for Las Vegas Recovery Centers in the transaction. Landmark now operates in four states and plans to open 10 new locations in 2021. Arisa Health announced the acquisition of the Wilbur D. Mills Treatment Center in Arkansas, which includes a residential and outpatient center as well as an apartment complex for those in recovery. It will be rebranded as Arisa Health Recovery at Mills. Behavioral Health Group announced several deals in Q4. It expanded into Rhode Island with the acquisition of the Center for Treatment & Recovery, LLC , which will be rebranded as BHG Pawtucket Treatment Center. It also announced it had expanded its footprint in Alabama with the acquisition of Huntsville Recovery, Inc. and Stevenson Recovery, Inc. in October. The two locations will be rebranded with the BHG name. In November, BHG acquired Wellness Ambulatory Care in Tennessee. In all, the company operates across 15 states. Discovery Behavioral Health acquired Prosperity Wellness Center , a 40-bed residential treatment center in Washington, representing the 10th brand added to the Discovery portfolio. The organization operates four existing outpatient centers in the state as well. Center For Discovery and Cliffside Malibu merged in 2018 to form Discovery Behavioral Health as a newly created parent company, backed by Webster Equity Partners . Autism Services & Intellectual/Developmental Disabilities Individuals with autism spectrum disorder and intellectual/developmental disabilities were among those experiencing added distress in 2020 attributed to reduced access to services because of the pandemic, according to a report from the National Institutes of Health. As a result, more individuals will likely need a higher level of care in 2021, including involvement from family and loved ones. “Care that extends to the family will be a sought-after service offering,” Taggart says. “We should expect to see buyers looking for acquisitions to enhance comprehensive services and whole-person care.” SPG in October announced two deals. It acquired applied behavioral analysis (ABA) provider Family Support Center as well as Go2Consult , a speech and language services provider. The transactions broaden the geographic coverage for SPG, a portfolio company of Ridgemont Equity Partners . Blue Sprig Pediatrics, Inc. announced a deal to acquire the assets of the Michigan-based Momentum Autism Therapy Services , a center- and home-based provider of ABA services. Pharos Capital Group, LLC in December acquired Catalyst Behavioral Solutions , a Utah-based mental and behavioral health services provider, marking its seventh acquisition. Catalyst offers Catalyst Academy, a program for children. In a platform deal , New Capital Partners and OSF Ventures , part of the OSF Health System, acquired DotCom Therapy, Inc , provider of virtual counseling and therapy for autism spectrum disorder. Caravel Autism Health announced the acquisition of Behavior Therapy Solutions of Minnesota . The combined organization will serve children with autism and their families through a network of six autism therapy centers in the state. Apara Autism Centers in December acquired Behavior Pioneers , a provider of ABA services with four locations in Texas. Mental Health Even now, providers are still wrestling with parity issues, Taggart said. Therefore, mental health organizations that have beneficial in-network contracts with payers will be attractive to strategic buyers. And consolidation will help providers gain the scale they need to bring much-needed leverage to the negotiating table. And any organization that can demonstrate comparable quality of care and reasonable profitability through the use of virtual appointments will be an attractive target. Pathways Health and Community Support, LLC completed the acqu here isition of Access Family Services, Family Behavioral Resources , and Autism Education and Research Institute —three intervention service organizations which will be combined into one entity. Pathways operates in 18 states and the District of Columbia. Previously, Atar Capital acquired Pathways from Molina Healthcare in 2018. Monte Nido & Affiliates , a portfolio company of Levine Leichtman Capital Partners , acquired Rosewood Ranch, L.P. , a network of three eating disorder treatment facilities in Arizona. With the transaction, Monte Nido now operates 29 residential and outpatient facilities in 11 states. The Stepping Stones Group , announced the acquisition of Ardor School Solutions , a provider of school-based therapeutic and behavioral health services. Stepping Stones is a portfolio company of Five Arrows Capital Partners . The deal expands the organization’s geographic footprint into New Mexico and Arizona. ProtoCall Services , a 24/7 telephonic crisis intervention provider acquired The Shrink Space , a referral management software platform that is used in higher education with a national network of more than 4,000 licensed clinicians, prescribers and treatment centers. Private equity firm Kelso has acquired a majority interest in Refresh Mental Health , an outpatient mental health network with 200 locations nationwide. Kelso’s stake in Refresh was acquired from affiliates of investment firm Lindsay Goldberg, which helped found Refresh in 2017. Locations acquired in this platform deal include outpatient substance use disorder, eating disorder and mental health treatment centers. Summit Behavioral Healthcare LLC purchased the shuttered 92-bed Clear View Behavioral Center in Colorado for $29.2 million in a deal that closed in December. Summit intends to apply for a new license and begin operations within the first six months of 2021. In a platform deal, Revelstoke Capital Partners acquired Family Care Center , which provides outpatient psychiatry services to the U.S. Armed Forces and veterans in Colorado. The organization plans to expand services in the state and in new geographic areas. Latticework Capital Management in December acquired Beacon Behavioral Hospital, which operates seven intensive outpatient locations and four inpatient hospitals in Louisiana. Now with this platform deal, leaders plan to expand into new states and add new service offerings. Magellan Health, Inc. in December completed a transaction to acquire a 70% interest in Bayless Integrated Healthcare , an outpatient behavioral health and primary care provider in Arizona. Magellan’s core competency has been in managed care, however, the organization has the option to buy the remaining equity in Bayless within the next 36 months. Bayless brings additional integrated health, telehealth and other provider capabilities to the Magellan portfolio. View the Q3 2020 Behavioral Health Report . Trackbacks/Pingbacks Behavioral Health M&A Report: Q1 2021 – Mertz Taggart - […] a busy quarter to close out 2020, BayMark Health Services stayed busy in the new year, announcing the acquisition of Partners in […]

BATON ROUGE, La., June 01, 2020 (GLOBE NEWSWIRE) — Amedisys, Inc. (NASDAQ:AMED), a leading provider of home health, hospice and personal care, announced today that, through one of its wholly owned subsidiaries, it has closed on its acquisition of Homecare Preferred Choice, Inc., doing business as AseraCare Hospice (“AseraCare Hospice” or “AseraCare”), a national hospice care provider with an executive office in Plano, Texas and administrative support center in Fort Smith, Arkansas. Under the terms of the agreement, Amedisys acquired 100 percent of the ownership interests in AseraCare Hospice for a cash purchase price of $235 million, which is inclusive of a $32 million tax asset bringing the net purchase price to $203 million. The Company did not use any of the funds received by the Company from the Public Health and Social Services Emergency Fund that was appropriated by Congress to the Department of Health and Human Services in the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to fund the acquisition. “AseraCare has been on our radar for a long time. We have long admired their strong culture, focus on patients and employees and commitment to always providing high-quality care,” stated Paul Kusserow, Amedisys’ president and chief executive officer. “We are excited about the opportunity, as one company, to bring the gift of hospice to more communities.” Founded in 1994, AseraCare Hospice cares for more than 2,100 patients daily and employs more than 1,200 hospice professionals in 44 locations across 14 states, generating approximately $117 million in annual revenues. This acquisition adds greater scale to Amedisys’ high-quality, nationwide network. Combined, our new hospice operations will include 190 care centers in 35 states, with an average daily census of approximately 14,000 patients and approximately 7,000 hospice employees. “We feel privileged to welcome AseraCare Hospice into the Amedisys family. We share our commitment to delivering compassionate, patient-centered care to patients and their families, and a culture of engagement and support to our colleagues and caregivers,” said Anthony Mollica, Amedisys’ president of hospice. “We are all in the hospice business because we care. For us, this is not our job; caregiving is our calling.” This acquisition is the fourth hospice acquisition for Amedisys since 2019. The Company acquired and integrated Compassionate Care Hospice in February 2019, RoseRock Healthcare in April 2019 and Asana Hospice in January 2020.   “AseraCare and Amedisys have always shared an absolute and sacred commitment to help our patients live each day to its fullest, one person, one family and one community at a time,” stated AseraCare President Larry Deans. “I am fully confident that Amedisys will continue and build upon our mission-driven purpose and high-quality care for our patients and families for years to come.” Read more here… GlobeNewswire Click to read Amedisys to Acquire AseraCare Hospice for $235 Million

For years, many medicaid-reimbursed healthcare services companies operated with a certain degree of "stealth." While you were aware of your internal growth and revenue, that data was largely private. That changed recently. The release of the most recent Medicaid payment data has acted as a searchlight on the private healthcare market. For agencies in non-medical home care and private duty nursing (PDN), internal performance metrics are now effectively public search criteria. If you have noticed an uptick in "exploratory" emails or calls from private equity groups, strategic acquirers, and other advisors, this transparency is the reason why. The Buyer’s New Map Institutional buyers and large strategic aggregators operate on data. With the new Medicaid files, their Business Development teams are no longer guessing who the market leaders are in a specific region—they are filtering for them. If your company is doing $5M or more in revenue, you are likely now a "Tier-1 Target" on a proprietary spreadsheet. For smaller agencies, you have become an ideal "add-on" candidate for platforms looking to increase density. Why "Direct Interest" Isn't Always a Compliment It is flattering when a multi-billion-dollar fund reaches out to "learn more about your story." However, from a first-principles perspective, you must recognize the tactical intent. When a buyer approaches you directly, their primary goal is to preempt a competitive process.  By engaging you before you have representation, they can: Define the Valuation:  They use the data they found to anchor a price before you know what the broader market would pay. Control the Terms:  They utilize their "deal fatigue" and sophisticated legal teams to navigate a transaction where they hold the information advantage. Eliminate Competition:  They know that if you go to market with a firm like Mertz Taggart, the price will likely increase as multiple buyers compete for the asset. Seller Beware: The Cost of Going Alone The danger of the current data release is that it creates a false sense of security. A buyer might offer a "fair" multiple of the revenue they see in the public data. But "fair" is not "maximum." As we have discussed in our Seller Beware  posts, owners who negotiate directly with sophisticated buyers often leave millions on the table—not because the offer was "bad," but because they lacked the competitive leverage to find the best  offer. The Mertz Taggart Perspective Visibility is a double-edged sword. While it is good to be noticed, being "found" by a professional buyer puts you on their home turf. Our role is to provide the counter-balance. We bring institutional-quality execution  to private sellers, ensuring that when a buyer comes to the table with their data, you meet them with a disciplined process, market-validated credibility, and a relentless advocate in your corner. Before you respond to that "exploratory" inquiry, ensure you aren't setting a ceiling on your life's work.

Originally presented as a live webinar by the Mertz Taggart behavioral health team: Kevin Taggart, Peter Thiessen, and Dr. Anke Stugk If you're a behavioral health business owner thinking about selling, whether that's six months from now or three years down the road,  the decisions you make today will directly impact what your business is worth when the time comes. We recently hosted a webinar covering the full lifecycle of a behavioral health transaction: how to prepare, what buyers look for, what the process actually looks like, and where the market stands heading into 2026. This post distills the key takeaways for owners who are weighing their options. Watch the full webinar here: The Market Is More Active Than You Think Let's start with the question everyone wants answered: is now a good time to sell? The short answer is yes…with some nuance. If you've been hearing that the M&A market is down, you're not wrong that deal volume pulled back from the highs of 2021 and 2022. Those were anomaly years, driven in part by anticipated tax changes and a wave of private equity capital entering behavioral health. Transaction volume nearly doubled compared to pre-COVID norms, and when it corrected in 2023 and 2024, it felt like a sharper decline than it actually was. Here's the reality: 2023 and 2024 were still solid years when compared to pre-pandemic baselines of roughly 100 transactions per year. And 2025 has been our busiest year since 2021 on the behavioral health side — we've closed seven transactions with several more in the pipeline. More importantly, private equity interest remains strong. We're seeing a high number of new platform investments, which is a leading indicator for add-on acquisition activity in 2026 and 2027. Every time a PE group makes a platform investment in behavioral health, they're planning to do multiple add-on acquisitions in subsequent years. That creates more buyers competing for well-run businesses like yours. What's happening by subsector Substance use disorder (SUD):  The biggest shift here is that several large strategic buyers — groups that used to account for 15 to 25 transactions a year combined — have been on the sidelines. But new buyers have stepped in to fill much of that gap. Out-of-network businesses remain harder to sell, though there are exceptions for highly specialized programs. Autism and IDD:  After a rough stretch in 2022 and 2023 driven by wage inflation and the high-profile Carta bankruptcy, the ABA market has rebounded. We're seeing competitive processes again for well-run programs, and buyer interest is strong heading into 2026. Outpatient mental health:  This remains one of the most active areas. Psychiatry practices with integrated counseling services are in particularly high demand. We're still seeing double-digit multiples for businesses that check the right boxes — strong financials, good payer mix, and a scalable model. A note on venture capital:  Over the past few years, venture-backed telehealth companies entered behavioral health and were valued like software companies. That growth has slowed considerably. The distinction matters: venture capital tends to invest in pre-profitability growth stories, while private equity invests in EBITDA-positive businesses. If you're running a profitable, well-managed practice, private equity is your buyer universe, and that market is healthy. Getting Your Financial House in Order Buyers will scrutinize your financials going back at least two years, sometimes three. The single most impactful thing you can do to prepare is make sure your books are clean, consistent, and well-organized. Consistency matters more than perfection.  Categorize your revenue and expenses the same way every month, every year. When a buyer or their QoE firm can't easily compare one period to the next because line items keep moving around, it creates questions, and questions slow deals down. Personal expenses are normal; just be transparent.  We see it all the time: owners running personal travel, vehicles, or other expenses through the business. That's fine. We handle these through what's called EBITDA normalization — we add back personal or one-time expenses to show the true profitability of the business. The key is being upfront about them from the start. Develop budgets and forecasts.  Buyers want to see that you have a plan and that you can execute against it. If you forecasted 15% growth and delivered 12%, that's a conversation. If you forecasted 30% and delivered 2%, that's a red flag. During the transaction year especially, your performance against forecast is under a microscope. No last-minute surprises.  This cannot be overstated. If there are pending audits, legal issues, licensing concerns, or accreditation problems, disclose them early. We've seen deals fall apart 60 days before closing because a seller tried to hide an accreditation issue — and it took them another two years to find a buyer after that. These things almost always come out during due diligence. Bringing them forward early lets everyone work through solutions while the deal is still on track. What Drives Valuation, and What Hurts It Understanding what buyers value helps you make better decisions long before you ever go to market. What increases your valuation Diversified payer mix.  The more insurance contracts you have (Blue Cross, Cigna, Humana, Medicaid, Medicare, and others), the less risk a buyer takes on. Heavy reliance on a single payer is one of the most common valuation discounts we see. A strong management team.  Especially if you're not planning to stay long-term, buyers want to know who's going to run the business after you leave. Having a capable number two or three in place, people with experience who are committed to staying, makes a meaningful difference in what a buyer will pay. A scalable model.  Buyers are thinking about growth from the moment they evaluate your business. Can they replicate what you've built in a new market? Do you have the back-office infrastructure (HR, IT, billing) to support expansion? And critically, have you proven it works? If you've successfully opened a second or third location, that gives buyers far more confidence than a theoretical growth plan. Consistent growth.  Steady, demonstrable growth over two to three years is one of the strongest signals you can send. It doesn't have to be dramatic, even modest growth shows a business that's healthy and trending in the right direction. Clean clinical documentation and billing compliance.  Low denial rates and well-maintained clinical notes make due diligence smoother and signal operational maturity to buyers. What raises red flags Declining revenue.  This gets noticed immediately and makes it significantly harder to get a deal across the finish line, especially if the decline happens during the transaction year. Low EBITDA margins.  If your margins are meaningfully below your peers in the same geography and service line, buyers will ask why — and whether fixing it means cutting costs or adding headcount, both of which affect their return. High staff turnover.  This can signal that you're running too lean, which leads to burnout. Buyers know that means they'll need to hire more people post-close, adding expenses they didn't budget for. Customer or referral concentration.  If one referral source or one payer represents a disproportionate share of your revenue, that's a risk factor. Diversifying before you go to market strengthens your position. Unresolved audits.  Whether it's Medicaid, Medicare, or an individual payer audit, open issues create uncertainty. Get them resolved before you're in a transaction if at all possible. Heavy reliance on grant revenue.  Grant-funded revenue is viewed differently than contract or insurance revenue, especially if the grants are new or if the relationship with the granting entity depends entirely on you as the owner. What the M&A Process Actually Looks Like If you've never sold a business before, the process can feel opaque. Here's how it typically works, and why a competitive process matters. Phase 1: Preparation (Month 1) Before anything goes to market, we spend the first month building your Confidential Information Memorandum (SIM), essentially a detailed profile of your business that tells your story to potential buyers. This involves multiple rounds of review and editing to make sure the numbers and narrative are right. Phase 2: Market outreach (Months 2-3) We send a one-page teaser with no identifying information to our buyer network, which is typically around 10,000 contacts. Interested buyers sign an NDA and receive the full SIM. They review it, ask questions, and submit what's called an Indication of Interest (IOI) — their initial view of what the business is worth and how they'd structure a deal. Phase 3: Management meetings and LOIs (Months 3-5) From the IOI pool, which might be 20 or more,  we work with you to narrow it down to five to eight groups that are the best fit. These buyers visit in person, spend a half-day to a full day with you, and then submit a formal Letter of Intent (LOI) with their final offer terms. This is where the competitive process pays off. On a recent deal, we received 23 offers. The lowest offer was 40% of the highest. Most sellers who try to negotiate on their own or work with a single buyer would never know whether they're leaving money on the table. Competition creates pressure that benefits sellers, buyers who really want a well-run business will pay above market to win the process. Phase 4: Due diligence and close (Months 5-9) Once you select a buyer and sign the LOI, they begin due diligence on an exclusive basis. This is the most intensive phase, and it's where organization and responsiveness make the difference between a smooth close and a drawn-out one. Quality of earnings (QoE):  The buyer hires a third-party firm to verify your financials. They'll examine every transaction, every billing record, every adjustment. We prepare our clients for QoE questions before we ever go to market, so by the time the buyer's team digs in, there are rarely surprises. Clinical chart review:  Typically 50 to 200 charts depending on business size. This isn't about finding fault, it's about understanding what the buyer is actually purchasing and where there's room for improvement. We've seen cases where this review actually helped our clients identify and fix documentation gaps before they became compliance issues. Legal due diligence:  The legal request list is often the most intimidating part — 200-plus questions covering everything from contracts to regulatory compliance. But here's what we tell our clients: "N/A" is a perfectly valid answer. A large portion of those questions simply won't apply to your business. Asset verification and reps & warranties insurance:  Toward the end, there's typically a supplemental process to catalog assets and secure insurance that protects both parties post-close. The key to getting through due diligence efficiently is being organized from the start. Consistent file naming, timely responses, and a team that's aligned on the process. Delays in providing information can slow the deal and, in some cases, erode buyer confidence. The professional team around you You're not doing this alone. In addition to your M&A advisor, you'll work with an attorney who handles the purchase agreement, reps and warranties, and legal risk protection, and an accountant who works through quality of earnings responses, working capital adjustments, and financial due diligence. Your advisor coordinates across all parties to keep things moving. Is Now the Right Time? There's no universal answer, but here are a few things worth considering. If your business is growing, your financials are clean, and you have a strong team in place, you're in a position of strength. Market conditions in 2026 look favorable — buyer interest is high, new platform investments are creating more acquirers, and deal volume is trending upward. If you're not quite ready, that's okay too. Many of the owners we work with spend a year or more getting prepared. Some we've known for years before the timing was right. The important thing is to start the conversation early enough that you're making strategic decisions about payer contracts, staffing, documentation, and growth, with an eventual exit in mind. Whether you're ready to go to market or just starting to think about what your business might be worth, we're always happy to have a conversation. Download this article as a guide: Mertz Taggart is a healthcare-focused M&A advisory firm representing sellers of behavioral health and home-based care businesses. To learn more or request a confidential valuation, reach out to our behavioral health experts via email at info@mertztaggart.com

Behavioral Health M&A Executive Summary: A Year of Resilience and Reality Checks Despite economic headwinds and a "bumpy ride" for many operators, 2025 concluded with a slight uptick in overall deal volume. The year ended with 180 total transactions , a modest increase from the 176 recorded in 2024. Q4 2025 saw approximately 39 announced transactions  (30 M&A and 9 Growth deals). While deal volume has cooled from the frenetic pace of Q1 2025, the market remains active, driven largely by the continued dominance of the mental health sub-sector. The Macro View: Regulation & Distress Several major currents shaped 2025: Lender Caution & The "Reimbursement Audit":  Deals in 2025 took longer to close as lenders tapped the brakes to conduct forensic-level diligence on insurance receivables. Following the cash flow disruptions caused by the Change Healthcare cyberattack earlier in 2024 and ongoing Medicaid uncertainty, credit committees are  scrutinizing revenue numbers more closely. Lenders are now slowing down processes to ensure —and effectively insure  against risk—that target companies have robust "denials management" processes and verifiable collectability. They are demanding proof that revenue cycles are resilient before releasing funds, forcing sellers to open their books for longer, more intrusive audits.  “We’re seeing many of the larger providers having reimbursement challenges, which isn’t helping ease the lender’s concerns.   Fortunately, it seems like some of these groups are putting these challenges behind them heading into 2026,” Taggart remarked.  Regulatory Scrutiny on "Roll-Ups":  Federal regulators (FTC/DOJ) have intensified their focus on private equity "roll-up" strategies, particularly in healthcare. This has extended deal timelines and forced buyers to be more cautious about local market concentration. Per Taggart, “We’ve had several deals in 2025 that the private equity backed acquirer didn’t want the deal announced, in order to not draw additional attention to the acquisition”.  The "Flight to Quality":  We are witnessing a bifurcation in the market. Premium assets with strong clinical outcomes and strong management teams are still commanding high multiples. Conversely, "distressed deals" are becoming common for operators who over-leveraged during the cheap-money era or failed to integrate rapid acquisitions. Mental Health M&A The Clear Leader Mental health continues to be the engine of the behavioral health M&A market. The sector outperformed all others in Q4 with 27 transactions , cementing its status as the most active sub-sector of 2025. For the full year, mental health racked up 111 transactions , significantly outpacing Addiction Treatment (33) and I/DD/Autism (36). Notable Q4 Transactions Consolidation in the pediatric and tech-enabled space was a major theme in the final quarter: Hazel Health's "Double Play":  In a major consolidation of the youth mental health market, Hazel Health acquired both Little Otter  (pediatric therapy/psychiatry) and BeMe Health  (teen mobile mental health) in October. The move, coupled with the appointment of Iyah Romm  (Cityblock founder) as CEO, signals Hazel's aggressive push to dominate the school-based and pediatric telehealth space. Talkspace  acquired Wisdo Health , an AI-powered social health platform, to integrate peer support and combat loneliness among its users. Handspring Health  acquired Joon Care , further consolidating the pediatric mental health market. Oak Integrated Care  completed two strategic mergers in December, acquiring both the Association for the Advancement of Mental Health  and the Association of Schools and Agencies of Public Health . Venture Capital & Growth Equity Mental health also continues to lead in venture capital interest with 34 growth deals  in 2025. Investors remain willing to deploy capital here, but they are becoming highly selective. Radial  raised a massive $50 million Series A  round led by General Catalyst . The funding is earmarked to expand its "brain medicine" network, focusing on interventional psychiatry (TMS, Spravato) and technology infrastructure. Nest Health  secured $22.5 million  in growth funding from Amboy Street Ventures  to scale its in-home, whole-family care model. Market Watch: The "Growth at All Costs" Reckoning Despite the activity, cracks are forming in some rapid-growth models. As Taggart predicted, several high-profile platforms faced significant operational and financial challenges in late 2025. Ellie Mental Health: The Franchise Fallacy? Once a darling of the franchise model, Ellie Mental Health  faced substantial headwinds in late 2025. Following rapid expansion, the company's auditors expressed "substantial doubt" regarding its ability to continue as a going concern in its most recent franchise disclosure documents. Franchisees have filed lawsuits alleging the company failed to provide promised backend billing support, leading to revenue cycle failures at the clinic level. In a move to stabilize cash flow, the company sold its corporate "test kitchen" clinics in Minnesota to Nystrom & Associates .  Omni Health Services: The Mid-Market Squeeze In one of the largest provider failures of the quarter, Omni Health Services , a major mental health provider with 18 clinics across Pennsylvania and New Jersey, filed for Chapter 11 bankruptcy  on November 25, 2025. The filing highlights the intense pressure on mid-sized groups that may be over-leveraged or struggling with rising labor costs and reimbursement friction. Talkspace: The Profitability Paradox   Even the public markets are signaling caution. Despite Talkspace  reporting profitability, the company's stock struggled to gain traction in Q4. A one-off $1.2 million loss  in Q3 2025 challenged the company's "bullish narrative," showing that investors are now scrutinizing margins far more closely than top-line revenue growth. Addiction Treatment M&A A Historic Low The addiction treatment sector struggled to find momentum, recording just seven transactions  in Q4. The full-year picture is equally stark. Addiction treatment saw the lowest total deal volume in the last six years . Venture capital has also dried up: there were only four VC deals in the sector for the entire year, with zero  occurring in the last two quarters. Notable Q4 Transactions Despite the slowdown, a few significant strategic moves and consolidations occurred: OneFifteen Closes:  In a sign of the times, OneFifteen , the high-tech substance use treatment center backed by Verily (Google)  and local health systems, closed its doors in Summer 2025. This underscores that even well-funded, tech-forward models are not immune to the sector's economic realities. BriteLife Recovery  acquired Summit Behavioral Health , a New Jersey-based provider, in a strategic expansion. River Cities Capital  made a platform investment in The Blanchard Institute , a North Carolina-based outpatient treatment provider. Autism and I/DD M&A Quiet Stability The Intellectual and Developmental Disabilities (I/DD) and Autism sector saw steady activity with 8 deals  reported in Q4. Growth capital has been notably scarce in this space. There were only two growth deals for the entire year , with one occurring in Q1 and the other in Q4. Notable Q4 Transactions Coyne & Associates  acquired Behavioral Health Works (BHW) , a major deal that reshapes the landscape for ABA providers in California. Brightli & Centerstone Merger:   Brightli  completed a mega-merger with Centerstone , creating one of the largest nonprofit behavioral health providers in the U.S. with over $1 billion  in combined revenue and 10,000 employees. Beacon Behavioral  remained acquisitive, completing two acquisitions in Q4 2025 to cap off an active year. VersiCare Group  expanded its footprint in Michigan with the acquisition of CHS Group, LLC . Outlook: 2026 As we move into 2026, the market is shifting from "growth at any price" to a focus on clinical quality, sustainable margins, and operational integration. "We are seeing a flight to quality," Taggart says. " We expect 2026 to be a year where solid, profitable companies command a premium , while distressed assets continue to come to market and should be an opportunity for buyers to purchase certain assets at a more attractive entrance point."   If you are interested in downloading the PDF version of the Q4 2025 Behavioral Health M&A Report, click the download link below:

Executive Summary: The Hospice M&A Pivot Record Volume:   Q4 2025 recorded 16 hospice transactions , the highest quarterly volume since 2021. Platform Catalysts:  Recent premium private equity platform transactions have reset valuation benchmarks  and established new precedent multiples . Arbitrage Opportunity:  Clear market data allows private equity and other financial sponsors to bid aggressively and still capture a healthy multiple expansion  through a combination of strategic M&A and De novos. Strategic Resurgence:  A more positive interest rate environment, and a narrowing valuation gap  have shifted the market pendulum back toward sellers. In the world of healthcare M&A, the last three years have felt like navigating through a heavy fog. Between rising interest rates and a persistent valuation gap , many owners chose to drop anchor and wait for clearer conditions. But as we move into 2026, that fog has officially lifted. The fourth quarter of 2025 recorded 16 hospice transactions —the strongest quarter we’ve seen in four years. As we noted in our Q3 2025 Home-Based Care M&A Report , the industry was already showing signs of a return to sanity, but this Q4 surge has officially signaled a broader market resurgence . The Power of the "Known Multiple" and Precedent Transactions The market doesn't operate in a vacuum; it needs a catalyst. A series of recent high-profile platform transactions  over the past 6 months have fundamentally reset the industry’s compass. While exact deal terms are often confidential, the multiples on these transactions are well-known within the private equity (PE)  and buyer community. For each of these transactions, there were dozens of financial buyers that didn’t win the deal—and they are now using those precedent multiples  to help inform their current bidding strategies. Multiple Expansion Playbook This new visibility has given private equity firms two specific incentives to jump back into the hospice space: Arbitrage Visibility:  PE firms now have a clear arbitrage map . They know that if they acquire regional agencies at current market rates and fold them into a sophisticated platform, they have a clear path to the frothy exit multiples proven by the previously mentioned recent platform trades. The Add-On Engine:  Once a PE group acquires a platform, they are often eager to sink their teeth into bolt-on acquisitions  at lower “non-platform” multiples to help them both scale and lower their overall acquisition multiple. This is fueling a strong appetite for agencies in the $5M–$20M revenue range that provide geographic density. The Tide is Turning: Interest Rates and Valuations As Managing Partner Cory Mertz recently shared with Jim Parker at Hospice News : "The past few years’ slump has been driven by a valuation gap where sellers hung on to 2021 expectations while buyers got more conservative. Since then, the gap has closed... and buyers have gotten more aggressive." Fed Chair Jerome Powell announced three small rate cuts in 2025.  With a consensus that we will see another 2-3 rate cuts  later this year, capital is becoming less expensive. For a buyer, even a small drop in rates changes the math, allowing them to stretch further on price for a high-quality, compliant asset. Navigating the 2026 Horizon The momentum from Q4 2025 is expected to carry directly into 2026, signaling a definitive shift in the market's direction. While sellers have moved past the 2021 "valuation hangover" to more realistic expectations, the real catalyst has been the buyers, who are once again eager to put capital to work. "We are bullish on hospice M&A after a four-year slump," says Mertz. “However, the bar for program integrity has never been higher. Buyers are prioritizing agencies with clean clinical records and robust documentation, especially in 'hotspot' states under enhanced CMS oversight.” For owners who have maintained a steady course and built clean, compliant, and scalable agencies, the market conditions have finally aligned. The slack tide has passed, and the pendulum has officially swung in your favor.