Aveanna CEO: Hospice Multiples Still Too High
•February 13, 2026
0
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.
Aveanna CEO: Hospice Multiples Still Too High
As Aveanna Healthcare Holdings (Nasdaq: AVAH) considers potential acquisitions, hospices are not on the menu due to their high price tags.
Hospice multiples skyrocketed during the boom M&A years of 2019 through 2022, reaching as high a 26x, sometimes more. As transactions slowed down between 2023 and 2025, one contributing factor was a disconnect between sellers’ and buyers’ expectations regarding valuations.
Now hospice deals are picking up steam. The fourth quarter of 2025 saw the industry’s highest deal volume since 2021, and one reason is that sellers’ and buyers’ expectations are becoming more aligned. However, this trend hasn’t yet gone far enough, according to Aveanna CEO Jeff Shaner.
“Hospice multiples are all north of 10x. We’ve seen some trade north of 15x. We’ve stuck our nose in a couple of small transactions just to see, and we’ve just gotten politely thanked very early on, but anything from 10x to probably 16 or 17x,” Shaner told Hospice News at the Home Care 100 conference in Scottsdale, Arizona. “It’s just an ecosystem where we were not successful. We like mid to high single digits. If you pay 10x or something, that’s a great quality asset, but that should be about the top that you’re paying.”
Consequently, the company is leaning into its home health and home care businesses, using a five-pronged approach.
These efforts include strengthening relationships with payers, finding opportunities to reduce costs, modernizing its medical solutions services, optimizing capital structure and cash flow, and increasing engagement among staff and leadership.
Aveanna’s preferred-payer and government affairs strategies has already increased revenue in its hospice and home health divisions, and the company intends to replicate this approach to drive growth in its medical solutions segment, CEO Jeff Shaner said at the Bank of America Home Care Conference.
As far as hospice growth, the company is pursuing home health and hospice de novo locations, with two or three expected this year, according to Shaner. Going forward, Aveanna will likely open two to four de novos annually, he said.
Two key goals are building density across Aveanna’s footprint and filling in gaps in markets where its payer partners are operating.
“It’s continuing to fill out those other areas and states where we don’t have meaningful coverage,” Shaner said. “Key states like Ohio, West Virginia, Tennessee, Kentucky, for us, we just need to fill those in, because our payer partners are relevant in those markets.”
The post Aveanna CEO: Hospice Multiples Still Too High appeared first on Hospice News.
0
Comments
Want to join the conversation?
Loading comments...