The number of M&A deals in home care fell in the third quarter of 2025. The decline is due to a decline in non-medical home care transactions, according to a new report from M&A advisory firm Mertz Taggart.
With a total of 20 deals overall, the report found that home health, home care, and hospice deal activity was subdued compared to the first and second quarters of 2025. However, the number of M&A deals in the third quarter of 2025 will be similar in value to what happened in 2024.
Currently, the home health sector is seen as a riskier bet due to the deep cuts proposed in the 2026 payment rules.
The proposal calls for a total 6.4% reduction in home health care costs, an estimated $1.135 billion decrease compared to 2025. Despite this uncertainty, interest in the field remains.
“While buyers are well aware of the risks associated with the potential for significant redemption reductions, there remains strong demand for high-quality assets,” Corey Mertz, managing partner at Mertz Taggart, said in a report. “Of the major home health providers building a continuum of care in an effort to negotiate value-based payment arrangements with payers, skilled home health is the most prominent service area.”
In the third quarter of 2025, there were 7 home health transactions, the same amount as in the previous quarter.
Typically a prolific acquirer, Pennant Group (NASDAQ: PNTG) continued its activity this quarter. The company was responsible for two of the seven transactions, acquiring both GrandCare Health Services and Healing Hearts Home Health.
Pennant's acquisition strategy to date has been to acquire community-driven home care assets with strong ties to specific markets.
The report also highlights UnitedHealth Group's (NYSE: UNH) acquisition of Amedisys (NASDAQ: AMED), a blockbuster deal in the third quarter that closed after several hurdles.
In the non-medical home care sector, transaction activity decreased slightly after increasing in the first and second quarters. A total of 11 transactions took place in Q3 2025.
One of the most significant home care transactions of the third quarter was Adas Homecare Corporation's (Nasdaq: ADUS) acquisition of Pennsylvania-based Helping Hands Home for $21.2 million. Overall, the personal care segment accounts for 76.5% of Adas' business.
Looking to the future, Merz said non-medical home care will continue to be of interest to buyers.
“Interest in the home health sector remains strong, primarily as sponsor-backed portfolio companies seek additional cash flow ahead of planned exits in the next 12 to 18 months,” he said. “We are also seeing demand for private home care increase as some strategic acquirers look to diversify their payer mix.”
