‘Pipeline Has Been As Full As Ever’: Amedisys, AccentCare Share M&A Outlooks

With providers, payers, private equity firms and retailers all having an eye on home-based care sellers, industry stakeholders anticipate that 2023 will be another busy year for M&A.

Last year, 99 home-based care deals and 38 hospice deals took place. So far, 2023 M&A activity seems to be starting off comparable to 2022, according to Les Levinson, co-chair of the transactional health care practice Robinson & Cole LLP.

“We think the growth pattern is going to continue, and certainly in the mid- to upper-mid market,” he said during a panel discussion at last month’s Home Care 100 conference.

At Amedisys (Nasdaq: AMED), there’s been a lot of activity across all three of the company’s lines of business, but having Contessa under its belt has allowed the company to lean into the higher-acuity market.

“The pipeline has been as full as it’s ever been,” Nick Muscato, chief strategy officer at Amedisys, said during the discussion. “Our acquisition of Contessa in 2021 opened a whole new deal flow activity for us around hospital joint ventures, for higher-acuity services, which we’re now transitioning into more common and comprehensive joint venture opportunities across all of our service lines. We’ve been very pleased with the level of activity that we’ve seen so far in 2023.”

As a company, Amedisys delivers a number of offerings, including home health, hospice, personal care and high-acuity care services. The company’s footprint includes 532 care centers in 37 states and the District of Columbia, and they provide care for more than 465,000 patients every year.

Amedisys will be active in both the company’s core space – and the new ones it enters through Contessa – this year.

“Within Contessa, we’ve talked about service line expansion opportunities into more at-risk models,” Muscato said.

Muscato pointed out that making Contessa a main priority falls into the larger trend of home-based care moving beyond the “three legs of the stool” — home health, home care and hospice.

More than half of home-based care providers plan to delve into high-acuity care in the home for the first time in 2023, according to a recent Home Health Care News-Homecare Homebase survey.

In terms of traditional home care, such as home health and hospice M&A, there are still opportunities blooming.

“I think it is going to be a fairly active market,” Tim Waddell, senior vice president of corporate development at AccentCare, said during the discussion. “When you look at the different segments of the market, I think the lower middle market is probably going to be the most active — you’ll still see a large transaction here and there. The debt capital markets are more challenged. I think there’s private debt and non-bank debt that’s pretty freely available. It’s going to be less leverage, it’s going to be higher interest.”

Dallas-based AccentCare is, in its own right, one of the largest providers of home-based care in the country. It operates in 32 states across the country.

Ultimately, Waddell believes that the greater spotlight that has been placed on the industry over the last few years has had an impact.

“When an industry like ours gets as much attention as it has in the last several years, with valuations and activity where it is, there’s going to be a lot more prospecting out there,” he said. “Prospecting from investment bankers, prospecting from investors like us.”

‘Pipeline Has Been As Full As Ever’: Amedisys, AccentCare Share M&A Outlooks – Home Health Care News