Hospice M&A Market Goes Strong in Third Quarter

The hospice space saw at least 10 hospice merger & acquisition transactions during the third quarter, a slight dip from the second quarter in which 14 transactions took place.

Despite this decline, the hospice M&A market continues to go strong. The hospice merger and acquisitions market has been thriving in recent years, with several top providers such as Amedisys, LHC Group, and others prioritizing expansion of their hospice footprint through acquisitions.

“We saw a lot more activity from the public companies like LHC Group Inc. (Nasdaq: LHCG) and Encompass Health (NYSE: EHC) this quarter,” said Mertz Taggart Managing Partner Cory Mertz. “In the recent past, private equity has really been the catalyst.”


Private equity interest in the hospice market has been growing in recent years, driven by multiple factors, including industry fragmentation, increased acceptance of palliative care services, the aging population, the changing regulatory landscape, and movement towards value-based payment models such as the 2021 Medicare Advantage hospice carve-in or the U.S. Centers for Medicare & Medicaid Services’ Primary Care First Initiative.

Among the third quarter transactions, Three Oaks Hospice in Dallas this September announced three acquisitions, using recently-acquired funding from a consortium of private equity groups. Three Oaks Hospice has received more than $21 million in private equity from Granite Growth Health Partners, Health Velocity Capital and Petra Capital Partners.

The three acquisitions — Total Hospice & Palliative Care, ABS Palliative and Hospice Care and Fellowship Hospice — increase the hospice’s referral network to more than 200 sources, enabling the agency to provide 84,000 days of care annually. Financial terms of these transactions were not disclosed.


“We started Three Oaks Hospice because there is a need to serve the underserved markets of those patients who’ve been diagnosed with a life-limiting illness,” Andrea Bohannon, CEO of Three Oaks Hospice, told Hospice News. “With no serious consolidation in the last several years of the over 4,500 hospice providers, we see an opportunity to leverage our collective experience to not only consolidate a fragmented industry, but to also innovate through technology that can further improve the quality of care and better serve the families of our patients. And just as important, we plan to pursue organic growth opportunities through our existing markets.”

In second significant third-quarter transaction, St. Croix Hospice announced the acquisition of Wisconsin-based Hometown Hospice & Homecare in Wisconsin, expanding St. Croix’s footprint to a total of 220 counties in Minnesota, Iowa, Wisconsin, Nebraska and Kansas. St. Croix is a subsidiary of the Chicago-based investment firm Vistria Group.

“It is our mission to bring the highest quality care to patients and families throughout the Midwest. We are thrilled at the opportunity to partner with a similarly high-performing, mission-driven organization which allows us to expand our services in eastern Wisconsin,” said Heath Bartness, CEO of St. Croix Hospice.

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