Dealmaking experts predicted health care M&A activity would drop in 2023 due to a number of headwinds. The first quarter of the year proved them right – and then some.
Overall, annualized transaction activity for 2023 is down 32% compared to 2022 levels. Home health, home care and hospice M&A activity was down on a year-over-year basis, though private equity investors and strategic buyers remain optimistic that the market will level itself out.
“A lot of those first quarter 2022 deals are holdovers from 2021, and so you’ve got a situation where you’ve got so much volume that happened in 2021 that you just can’t keep up that kind of a pace,” Dexter Braff, president of the M&A advisory firm The Braff Group, told Home Health Care News. “Then you have all of those external market conditions: rising interest rates, inflation, increased wage rates, the ending of the public health emergency. Those variables are contributing to people saying, ‘Alright, we need to take a breath and regroup.” Read more.
