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Provident Healthcare Partners Provident Healthcare Partners

Rising Interest Rates Unlikely to Slow Hospice M&A; Largest Deals May Take the Brunt

Provident Healthcare Partners
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Rising interest rates and unlikely to deter investors or strategic buyers from acquiring hospice companies.

The Federal Reserve raised interest rates by 0.75% earlier this month. The rates now range from 3.75% to 4%. The Fed will likely institute further rate hikes to combat record-high inflation.

Higher interest rates will push up borrowing costs, making hospices more expensive to purchase in the long-run. But this won’t curb investors’ appetites for hospice assets, according to Jake Vesely, senior associate at Provident Healthcare Partners.

“Strategic buyers in the post-acute space will continue to pursue expansion in the hospice market via M&A, so long that it remains accretive, as it’s one of the fastest ways to increase market share in existing locations or to expand into new markets,” Vesely told Hospice News in an email. “Given the attractive demographics of the hospice space, there continues to be an influx of new private equity firms looking to get into the space in addition to the existing firms that have been searching for an asset over the past few years.”

Despite a slowdown this year, deal volume in hospice M&A remains strong and continues to outpace other health care sectors. The prior two years saw hospice deal record highs in terms of volume and valuations, propelled by favorable demographics, rising demand for care in the home, and the promise of health care cost savings.

Hospice and other home-based care assets continue to draw a widening range of buyer types, according to a recent Provident report. Health care organizations in adjacent verticals to both home health and hospice “remain bullish” on expanding across these sectors, the report indicated.

Access the full article on Hospice News: Rising Interest Rates Unlikely to Slow Hospice M&A; Largest Deals May Take the Brunt

About Hospice News

Hospice News (HN) is an independent source for breaking news and up-to-date information on the hospice industry.  The coverage spans the hospice world specifically, from large, national service providers to independent care companies.  Its news and perspective gives industry professionals the information they need to make the best decisions in their day-to-day business operations.

HN is owned and operated by Chicago-based Aging Media Network.  For more information, visit https://hospicenews.com/. External Link. Opens in new window.. External Link. Opens in new window.. External Link. Opens in new window.. External Link. Opens in new window..