New Heights for Post-Acute M&A: A Look at 2020 & What’s to Come in 2021
The 2020 Post-Acute M&A Landscape: Navigating PDGM & COVID-19
There is no doubt that 2020 brought many obstacles to the post-acute M&A landscape. There was the commencement of the Patient Driven Groupings Model (PDGM) for the home health industry and the emergence of the COVID-19 pandemic, which brought a potential to halt most M&A activity for the year. However, the combination of these hurdles also brought overwhelming interest to the post-acute industry, record-high multiples, and opportunities for providers and investors to strategically position themselves in the market.
Although the pandemic led to Q1 and Q2 delays in M&A activity, it was not capable of bringing all activity to an entire halt. The pandemic allowed the post-acute industry to show its resilience, strength, and importance as providers of all sizes across the nation quickly pivoted in response and re-positioned themselves to continue to provide high-quality care to their patients.
The spotlight on in-home care.
COVID-19 in many ways accelerated the growth of the home health and hospice market as patients were being diverted to receive care in their home verse a facility setting. At the same time, strategic players and private equity investment groups redirect their path forward on how to get the most out of 2020 and maximize the number of transactions prior to year-end. As 2020 closed, many organizations turned in their best financial year ever.
McBee Achieves Record Year in M&A
Provider, private equity, and law firm clients
Total purchase price of M&A transactions McBee assisted clients on in 2020*
Number of transactions McBee assisted clients on in 2020
In the evolving M&A landscape, partnering with the right strategic advisor is key.
McBee is honored to serve as a trusted strategic advisor to support our clients in their efforts to go-to-market or conduct buy-side clinical compliance reviews. During the 2020 calendar year, McBee supported our clients in completing 19 publicly reported transactions carrying a purchase price exceeding $1.8 billion *(based on disclosed purchase prices only). Our commitment to our clients, compliance and quality is unmatched in the industry. In Q4 2020 alone, McBee assisted their clients in completing 9 transactions. We believe this year-end flurry of activity is a catalyst to what 2021 has in store for the industry. Read our press releases below for more insight.
2021: Discovering Opportunities in Rapid Regulatory Change
As we adjust to the new year, the challenges of 2020 still linger along with new hurdles for home health – such as the elimination of the request for anticipated payment (RAP), the continued expansion of the Review Choice Demonstration (RCD) in Florida and North Carolina, the Medicare Advantage carve-in for hospice, and continued rollout of electronic visit verification (EVV) requirements for Medicaid homecare providers.
Despite these regulatory overhauls, the post-acute industry continues to attract strategic players and private equity interest as care at home models such as skilled nursing facilities-at-home and hospital-at-home show their value. The emerging growth and innovation surrounding telehealth and continued shift to value-based care will allow post-acute organizations to showcase their abilities as high-quality, cost effective providers of patient-centered care.
Knowledge drives M&A results.
At McBee, we empower organizations to create a smooth M&A process with industry-leading regulatory and clinical compliance insight. Obtaining current and accurate compliance information is key – whether you are evaluating day to day operations, preparing to put an organization on the market, or as a buyer evaluating a potential home health or hospice acquisition.
In our whitepaper, learn how home health and hospice organizations can leverage best practice clinical compliance assessments to understand their historical trends, evaluate current risks, and identify target areas for improvement – gaining all the knowledge needed for a successful M&A transaction.
A guide for the rapidly growing M&A landscape. McBee’s unique advantages for every acquisition equip organizations with the insight needed to maximize value and empower negotiations. Partnering with us, you’ll receive trusted, strategic guidance you need to confirm the compliance of any investment, no matter how complex. Discover how a McBee can help you adapt, innovate and thrive in the 2021 M&A world.
“A trusted advisor is critical to the acquisition process. Whether it’s conducting introspective diligence ahead of a process, or as a buyer to confirm the quality and overall risk of a target. Through numerous processes, we’ve found that partner in McBee. They empower us with the data necessary to make smart decisions on investments, and tailor specific integration plans for successful acquisitions.”
“When our organization decided to go through the sale process for Queen City, it was important for us to engage a trusted advisor familiar with hospice mergers and acquisitions to maximize our value. The insight McBee provided in the clinical review proved to be extremely thorough and detailed, positioning us for the market by painting a full picture of our documentation and compliance practices.”
“McBee proved to be the right strategic advisor for this transaction due to their thorough analysis, customized approach, and extensive experience with hospice providers. We are thrilled to have worked with McBee for the sale of St. Croix and know the hospice organization is ready for its next chapter of growth.”
“The insight that McBee provided into the impacts that PDGM would have on Advanced Home Care (AHC) allowed us to be proactive in determining how to position them for success post-acquisition. Through their detailed analysis, McBee provided a holistic view of AHC’s compliance by evaluating requirements for billing as well as ensuring that we fully understood PDGM’s future impact to the home health business. McBee continues to prove their steadfast dedication to our success.”