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Why Home Healthcare and Hospice is Getting Investor Attention

Posted on January 17, 2022 By

Investors are currently seeking opportunities that will allow them to invest their funds in safe-havens.

Prior to the pandemic, the market saw investors being more active in the home healthcare and hospice industry. Private equity investment within the space was at an all-time high in 2019. Private equity has been interested in the space because the industry has favorable reimbursement policies in the United States, and patients are becoming less reliant on visiting hospitals.

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The pandemic has allowed for remote monitoring and has made virtual visits more mainstream. This new level of normalcy has opened more opportunities within the sector. If an investor is seeking to diversify their traditional practices, many investors feel that home health businesses are ideal to integrate with traditional providers. The attractiveness of the sector has trade, synergistic, and new investors seeking opportunities within space.

You may ask what is driving the interest in this market. According to the U.S. Census Bureau, by 2030, approximately 12% of the world population will be 65 or older. Baby Boomers that currently own many companies within the space are also aging and looking to retire. The pandemic has also accelerated some business owners’ exit strategies, which has allowed more quality businesses to be available for sale.

Grata, a private company intelligence engine, estimates that there are 305 home healthcare companies in North America. Of these 305 home healthcare companies, it is estimated that 90% remain independently owned. Florida, California, and New York—in that order—have the highest concentration of home healthcare companies, and around 50% of the companies within the space have 51-5,000 employees. With only roughly 7% of the sector receiving funding to date, there are still plenty of opportunities for investment and consolidation within the space.

Whether you are a first-time acquirer or a seasoned professional, if you haven’t considered home healthcare acquisitions in the past, 2022 might be the year to reconsider your search parameters.

 

  Kendall_Stafford2Author
  Kendall Stafford
  Managing Partner
  Benchmark International

  T: 512 347 2000
  E: Stafford@benchmarkintl.com 

 

 

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ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

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