In an article for Hospice News, Bass, Berry & Sims attorney David Cox discussed how valuation may impact the number of completed hospice transactions amid the current economic environment. Along with higher interest rates and market fluctuations, an ongoing disconnect between sellers and buyers on valuations will continue to impact deal completion.
“There’s still some valuation disconnect. The multiples that buyers are comfortable paying probably pulled back some, and I don’t know that there’s been a complete acceptance of that on the part of sellers,” David told Hospice News. “We’ve seen some [deals] in 2023 with buyers trying to stretch to meet the seller’s expectations, but they’re really looking for pristine assets. To the extent that they’re trying to stretch to meet those valuations and then not finding a pristine asset, we saw more transactions that didn’t make it to the finish line than in prior years.”
The full article, “How PE Firms Are Adjusting Hospice Exit Strategies in a Shifting Market,” was published by Hospice News on December 6and is available online.