Home health and hospice provider Enhabit has agreed to be taken private by private equity firm Kinderhook Industries in a deal worth $1.1 billion.
Under the deal terms announced Monday, shareholders will receive $13.80 in cash per share, representing an almost 25% premium over Enhabit’s closing stock price on Feb. 20.
The Dallas-based provider — which has almost 250 home health locations and over 115 hospice locations in 34 states — will cease trading on the New York Stock Exchange when the deal closes, which the companies expect to happen in the second quarter this year.
Kinderhook, which has over $10 billion in committed capital, says it invests in middle-market companies with niche markets. Its healthcare portfolio includes integrated provider AbsoluteCare, value-based physician group Better Health Group and provider organization Revere Medical.
If the deal closes, it will represent one of the larger healthcare PE deals in recent years as acquisitions in the industry accelerate. Despite macroeconomic uncertainty around President Donald Trump’s tariffs, PE deal values in healthcare reached a record high of $191 billion last year, according to an analysis by Bain & Company.
Home health and hospice has been an attractive area of acquisitions for private equity firms, which typically acquire companies and then sell them in three to five years for a profit, as the aging U.S. population drives increased demand in the space.
In addition, a fragmented home health and hospice market make it more convenient for PE-controlled providers to acquire others and gain market share in “roll-up” acquisitions. Various legal loopholes in Medicare also make it easier to extract profit from hospice providers, according to a report from the Private Equity Stakeholder Project.
A JAMA report shows that from 2006 to 2024, PE firms acquired 749 home health agencies.
However, PE firms have faced criticism for burdening providers with debt, leading to lower care quality at facilities.
An October study in Health Affairs found that PE-owned hospices reported the highest profit margins while spending the least on patient care compared to their for-profit and nonprofit counterparts. Another study found that caregivers report more negative experiences at facilities owned by private equity and publicly traded companies than nonprofit facilities.
PE firms have also faced criticism from Congress for their healthcare investments. Last year, a bipartisan Senate investigation found private equity giants Apollo Global Management and Leonard Green & Partners downgraded care at hospitals and prioritized investment gains.
