Home Care Sector Update – February 2026

2025 M&A Activity Recap & Key Themes Shaping 2026

As owners evaluate growth, partnership, and exit strategies in 2026, this article provides an update of merger and acquisition (M&A) activity within the Home Care sector, highlighting key themes and summarizing transaction activity across the Personal Home Care, Home Health, and Hospice segments.

Home Care Sector Remains Crucial to U.S. Healthcare Infrastructure

Home-based care has continued to strengthen its position as a vital part of healthcare infrastructure, driven by durable demographic demand, patient preference, and the cost advantage relative to higher-cost institutional settings. Reimbursement remained an evolving landscape in 2025, as value-based care expanded and managed care penetration grew across key payer channels. Federal and state agencies have increased data transparency through expanded reporting requirements, raising the premium on providers that can demonstrate strong operational controls, sophisticated technology infrastructure, and consistent service quality. Technology has moved from a “nice to have” to a competitive requirement, with artificial intelligence (AI) increasingly at the center of strategic roadmaps. Against the backdrop of a sustained labor shortage, providers have looked to AI to power smarter scheduling and staffing decisions, automate documentation and revenue cycle workflows, and enable more proactive clinical and quality oversight. For investors, the most compelling operators have been those that translate these tailwinds into repeatable execution: building scalable caregiver recruiting and retention engines, tightening scheduling and utilization discipline, and maintaining a compliance-first culture across documentation and service delivery.

2025 was defined by competitive processes for high-quality assets, scaled buyers building density through add-ons, and technology moving from a differentiator to a core requirement. Looking ahead to 2026, we are seeing buyers lean even more heavily on proof of execution, including workforce stability, documentation discipline, and measurable performance, while remaining highly active across the continuum.

David WolbergVice President, Capstone Partners

Home Care M&A Accelerates in 2025, Outpacing 2024 by ~41%

Home Care sector deal activity increased meaningfully in 2025, rising 40.5% year-over-year (YOY) to 104 announced or completed transactions. Activity reflected broad-based buyer engagement across strategic and financial sponsors, supported by durable demand for in-home services, continued platform-building across fragmented local markets, and a growing focus on service line growth and geographic expansion. Strategic buyers completed 61 transactions in 2025 (+32.6% YOY), maintaining a majority (58.7%) share of overall sector activity. Public strategics were notably more active, completing 20 transactions versus seven in the prior year period. Public company buyers were largely focused on expanding footprint and broadening offerings through acquisitions of smaller, middle market operators. Private company buyers continued to represent the majority of strategic volume (67.2%) due to the highly fragmented composition of the sector. Private equity (PE) activity also expanded in 2025, increasing 53.6% YOY to 43 deals, with 11 platform investments (+83.3% YOY) and 32 add-ons (+45.5% YOY). Financial buyers continued to aggressively pursue consolidation in the sector, with newly-established platforms—attracted by an abundance of cost, service line, and geographic synergies—set to heighten competitive dynamics. Looking ahead, buyer appetite is anticipated to remain supported by long-term demographic demand and ongoing consolidation opportunities, with transaction velocity benefiting from a more constructive financing backdrop for scaled, well-positioned operators.

Home Care M&A Activity by Segment

Each segment within the Home Care sector has distinct reimbursement characteristics, labor dynamics, and care delivery models that shape investor underwriting and strategic rationale. The following sections summarize key themes and 2025 M&A activity across Personal Home Care, Home Health, and Hospice.

Personal Home Care Continues to Attract the Largest Pool of Investors

The Personal Home Care segment led dealmaking in 2025, posting a 43.9% YOY increase to 59 deals, supported by powerful demographic demand as more seniors prefer to age in place. Despite uncertainty from the One Big Beautiful Bill in the first half of 2025, the market moved forward with more clarity as states worked through budgets and implementation, prompting investors to sharpen diligence around state-by-state exposure and reimbursement dynamics while maintaining conviction in the segment’s long-term growth profile. Operators have differentiated through specialized service offerings such as dementia and memory care, and through evolving care delivery and workforce models designed to reduce costs and expand labor supply. Investors have placed premium valuations on businesses that can demonstrate strong referral channels, high fill-rates, efficient staffing, and robust compliance infrastructure with rigorous electronic visit verification (EVV) and documentation discipline. Entering 2026, non-medical personal home care is expected to remain a key focus across a wide range of investors.

Home Health Moves into 2026 with Improved Visibility and a Sharper Focus on Measurable Clinical Outcomes

Home Health segment M&A activity increased 75.9% YOY to 51 announced or completed transactions in 2025 as scaled strategic buyers leveraged existing infrastructure to add density, expand payer networks, and deepen value-based care relationships. Following reimbursement uncertainty in 2025, the Calendar Year (CY) 2026 Home Health Final Rule rate released at an estimated aggregate reduction of 1.3%, much lower than the initially proposed 6.4% reduction, according to the Centers for Medicare & Medicaid Services (CMS).^1,2 This development has provided investors with greater certainty to underwrite and model performance entering 2026. Value-based care and managed care have continued to expand, with Medicare Advantage increasingly shaping authorization processes, network dynamics, reimbursement, and margin performance for home health operators. This emphasis has been further reinforced by the new Transforming Episode Accountability Model (TEAM) model, which began in January 2026 and has made participating hospitals financially accountable for total episode costs and outcomes, increasing the value of high-performing home health partners after discharge. Investors have placed premium valuations on home health operators with strong referral relationships and measurable outcomes, supported by stable clinical staffing, a robust compliance infrastructure, a modern technology infrastructure, and a diversified service mix.

Acquirers Target Hospice Platforms with Scale, Robust Compliance, and Referral Diversification

Hospice segment M&A activity increased to 34 announced or completed transactions in 2025, representing 21.4% YOY growth, as robust buyer demand and competitive processes drove attractive valuations for quality hospice assets. The segment benefited from a 2.6% increase in the Medicare hospice payment rate, effective October 2025, according to CMS.³ Despite demographic tailwinds and attractive reimbursement dynamics, buyers remained selective, prioritizing clinical consistency and strong compliance amid heightened regulatory scrutiny. Heading into 2026, hospice operators are anticipated to lean into clinical and documentation discipline, deeper collaboration across referral partners and adjacent service lines, and practical technology enablement, including early AI use cases focused on documentation efficiency. Investors have placed premium valuations on hospice operators that demonstrate strong documentation integrity and audit readiness, healthy referral diversification, disciplined length-of-stay, effective management of hospice aggregate payment caps, and scalable clinical infrastructure that supports growth without compromising patient experience.

Home-based care continued to attract robust investor demand in 2025, driven by the structural shift toward aging in place and the growing preference among families for flexible, home‑centered support. In 2026, buyers are expected to favor operators that pair strong local market positioning with scalable infrastructure, including workforce depth, disciplined compliance and documentation, and technology enablement that improves day-to-day execution. For owners considering strategic planning, current market dynamics have created a compelling opportunity to assess the best path forward, whether that is growth capital, a strategic partner, or a full exit.

To discuss the market implications of recent regulatory developments and strategic planning, provide an update on your business, or learn about Capstone’s wide range of advisory services and Home Care M&A knowledge, please contact us.

Brendan Bradley, Associate, was the lead Market Intelligence contributor to this article.

Endnotes