While deal activity varied by quarter last year, the space saw 51 deals overall in 2020. That’s just two fewer than the 53 transactions it posted in 2019, according to The Braff Group. And currently, the outlook for SUD M&A is “about as bright as it has ever been,” according to Dexter Braff, president of the M&A advisory firm.
“To stay successful and really be effective at managing your revenue cycle management, it’s getting more sophisticated than it used to be for hospice providers. There’s going to be various iterations of programs coming up and policies that are going to require different payers, and you’ve got to be able to partner with those different payers,” Kulik told Hospice News. “That is something that’s going to be new for hospice providers — that sophistication level.”
"Tomorrow Health’s infusion of cash is indicative of rising investor interest in the home-based care space and associated industries like DME. Private equity hospice transactions rose nearly 25% from 2011 to 2020, according to a report from The Braff Group."
“A lot of people in the merger and acquisition world, across the board, believe that 2021 might be a record year in terms of transactions,” Braff said. “It could, in fact, be a record year in autism services as well.”
Despite recent hospice and home-based care acquisitions involving health systems, such transactions are unlikely to become a common practice during 2021 and 2022. However, health systems are taking a closer look at companies that provide non-medical assistance to help seniors age in place.
Rising interest from special-purpose acquisition companies (SPACs) could make competition in an already active hospice M&A market more fierce in coming years.