Hospice acquisitions saw a gentle rebound in Q1 2025. Deal volume is up relative to 2024’s slump, but activity has not reached the boom levels of 2020 and 2021.

The M&A market’s rejuvenation extends across a range of home-based care industries, according to a new report from the M&A advisory firm Mertz Taggart. The “tides have turned,” with a total 29 home-based care transactions during Q1, the most active quarter since 2023, the report indicated.

“Deal activity is definitely picking up. When I say the activity I’m not just talking about closed deals,” Mertz Taggart Managing Partner Cory Mertz told Hospice News. “On the ground, I think more deals are moving forward than we saw, a year ago, for sure. So there’s definitely momentum.”

Current economic uncertainties make further dealmaking hard to predict, but private equity firms are likely to pursue transactions. These firms are sitting on a substantial amount of dry powder and are seeking to deploy capital in platform and bolt-on deals, according to Mertz.

“We’ve got a little bit of chaos in the economy. It’s making it a challenge. But also we just come out of a kind of an historically low period of M&A activity,” Bruce Vanderlaan, managing director for Mertz Taggart, told Hospice News. “There’s a lot of pent up demand that makes it really hard to make a prediction, but at the same time, I’m seeing a lot of activity.”

Factors contributing to this are lower interest rates, for now, and the number of assets purchased in 2020-2021 reaching maturity and coming again to market.

Source: Mertz Taggart

Seven hospice transactions occurred in Q1. Some of the more significant disclosed deals included the following:

• Bristol Hospice, a portfolio company of the private equity firm Webster Equity Partners, acquired St. Agatha Comfort Care in Las Vegas for an undisclosed sum.
• Choice Health at Home purchased Devotion Hospice in Texas. Financial terms were kept confidential.
• Minnesota-based St. Croix Hospice completed two deals for an undisclosed amount — Hospice of Siouxland in Iowa and some of Mayo Clinic Health System’s hospice assets in Minnesota.
• Uplift Hospice acquired Star of Texas Hospice, expanding its average daily patient census to 450 across Arizona, Nevada and Texas. 

Demand for hospice deals remains high, but many buyers and investors are concerned about regulatory scrutiny and potential payment clawbacks due to documentation or other issues, according to the report. Thus, the diligence phase of transactions is becoming more rigorous when it comes to compliance.

“There’s still plenty of demand out there for quality assets, but the definition of ‘quality assets’ has changed over the past five years,” Mertz said. “Buyers have become a lot more selective, especially with all the [regulatory] scrutiny on hospice. Buyers are fearful of clawback risk. That’s the biggest issue.”