Aveanna CEO: Hospice Multiples Still Too High

Why It Matters

Elevated hospice valuations are throttling consolidation, reshaping M&A dynamics in the post‑boom market. Aveanna’s pivot to organic expansion signals a broader industry shift toward cost‑effective growth models.

Key Takeaways

• Hospice multiples exceed 10x, often 15x+
• Aveanna targets 5-9x valuation range
• Company pivots to home health, de novo sites
• Focus on payer relationships, cost reduction, capital optimization
• Aims to add 2‑4 de novo locations annually

Pulse Analysis

The hospice sector experienced a valuation frenzy from 2019 through 2022, with deal multiples soaring to 26 times earnings in some transactions. This surge was driven by private equity inflows and a perception of stable cash flows, but it also created a pricing disconnect between sellers eager for premium exits and buyers wary of overpaying. As the market cooled in 2023‑2025, many deals stalled, highlighting the unsustainable nature of those lofty multiples.

Aveanna Healthcare’s leadership is now vocal about the pricing gap, insisting that multiples north of 10x are untenable for a disciplined investor. Shaner’s preference for mid‑single‑digit multiples reflects a focus on value creation rather than speculative premiums. Consequently, Aveanna is channeling capital into its core home‑health and home‑care platforms, launching two to four new de novo sites each year in underserved states such as Ohio, West Virginia, Tennessee, and Kentucky. By strengthening payer relationships, reducing operational costs, and modernizing medical‑solutions services, the company aims to boost cash flow without relying on expensive acquisitions.

The broader implication for the hospice industry is a likely slowdown in high‑priced M&A activity, creating space for smaller, strategically aligned players to acquire assets at more reasonable valuations. Investors may see a shift toward profitability metrics and operational efficiencies rather than growth through costly deals. As valuation expectations realign, companies that can demonstrate strong payer contracts and scalable home‑care models—like Aveanna—are positioned to capture market share while preserving shareholder value.