My 3 Takeaways from the Enhabit-Kinderhook Transaction
Hospice News Senior Reporter Holly Vossel did some excellent reporting on the recent $1.1 billion acquisition of Enhabit Inc. (NYSE: EHAB) by the private equity firm Kinderhook Industries, but I still want to add my own two cents.
The implications of the deal for the hospice and home health communities are far-reaching and multi-faceted, but I want to call out three points that struck me as I considered this news.
Independent Publicly Traded Companies Dwindling
Every year fewer standalone publicly traded companies are active in the hospice space. This is due to a series of huge acquisitions in recent years, such as the purchases of LHC Group and Amedisys by UnitedHealth Group’s (NYSE: UNH) subsidiary Optum.
Four of the 10 largest hospice providers of 2024 were publicly traded — UnitedHealth Group, Amedisys, BrightSpring Health Services (Nasdaq: BTSG) and VITAS Healthcare, which is owned and operated by the publicly traded company Chemed (NYSE: CHE). This is according to research by Hospice News and the data analysis company Hospice Analytics. As of 2025, however, Amedisys is knocked off that list due to the Optum transaction.
This reflects a larger trend in the public markets — and a shift in the balance of economic power in the hospice market towards private equity.
Since the enactment of the Sarbanes-Oxley Act in 2002, the number of initial public offerings in the United States has declined markedly. As a result, private equity — ranging from individual investors to large investment firms and venture capital groups — has become one of the limited options available to health care providers seeking capital for expansion. Moreover, the financial capacity of these investors generally surpasses that of nonprofit funding sources, which rely primarily on philanthropic contributions.
Private Equity Renews Appetite for Hospices
After a three-year lull, private equity buyers are once again hungry for hospices. The hospice M&A market has recently regained momentum after a lengthy slump. During that time, virtually no large-scale private equity hospice platform deals took place, due to a barrage of headwinds like inflation, elevated interest rates and increased regulatory pressure, as well as buyers needing time to integrate the sizable assets they acquired during the 2020–2022 surge.
But that is changing. For years, these investors have been sitting on more than $800 billion in dry powder — but now they are returning to the hospice marketplace with guns a-blazing.
In late 2025, the private equity firm Linden Capital Partners acquired Agape Care Group, a major hospice and palliative care provider. In a separate transaction, four private equity-backed buyers each purchased segments of Traditions Health, which had previously been a portfolio company of Dorilton Capital Partners. The acquiring companies — VitalCaring, The Care Team, LifeCare Home Health Family, and Mission Healthcare — divided Traditions Health’s assets along geographic lines.
A range of other PE-backed hospices have completed smaller tuck-in deals as well, such as Choice Health at Home’s purchase of Alliant Home Health, Alliant Palliative Care and Alliant Hospice. Agape Care Group also recently picked up Community Hospice of Alabama.
Private equity investment in hospice has historically gone strong. Between 2011 and 2020, hospice transactions involving private equity increased by nearly 25%, according to an industry transaction report from The Braff Group shared with Hospice News. Roughly half of the nation’s 20 largest hospice chains are now owned by private equity firms.
Macroeconomic conditions have also played a role in the rebound. In 2024, the Federal Reserve lowered U.S. interest rates by 0.5 percentage points, followed by an additional quarter-point cut in October 2025.
Because private equity firms often rely on debt financing to fund acquisitions, interest rate shifts can significantly influence hospice merger and acquisition activity. The decline in rates, from approximately 5.5% to a range of 3.75% to 4%, reduces borrowing costs and may stimulate increased dealmaking as capital becomes less expensive.
Expect a Focus on Value-Based Care
Enhabit’s buyer, New York City-based Kinderhook Industries, has an extensive portfolio that covers numerous sectors, ranging from health care, construction, automotive, manufacturing, waste management and a slew of others.
The $1.1 billion Enhabit deal is a big one for the firm, exceeding its typical investment range. Kinderhook makes control investments in companies with transaction values stretching from $25 million to $150 million.
The firm describes its investment philosophy as “predicated on partnering with strong management teams to build market leaders through targeted growth opportunities.” Kinderhook specializes in transactions that involve entrepreneurial-owned businesses, non-core divisions of public companies and small capitalization companies that lack institutional support.
Kinderhook’s current health care portfolio includes five companies, Revere Medical, Lifeline Screening, Better Health Group, Avita Health Solutions and Absolute Care. A common thread among these diverse companies is that they are all heavily invested in value-based care models.
One can reasonably expect that value-based care will continue to be a key priority for Enhabit as it comes under Kinderhook’s wings. It’s an expectation shared by Joe Widmar, director of mergers and acquisitions at business and technology consulting firm West Monroe.
“I wouldn’t be surprised if they have value-based care aspirations for the organization beyond what they’re currently doing,” Widmar told my colleague Morgan Gonzales, associate editor of Home Health Care News. “With a sponsor as well-rooted in various platforms and services that support value-based care, I would anticipate a pretty aggressive movement in that direction and some good support from the sponsor in doing so.”
For this “aggressive movement,” the home health and hospice provider has already laid the groundwork.
To expand its referral network and increase patient volume, Barb Jacobsmeyer, president and CEO of Enhabit Inc., has emphasized the goal of positioning the company as a “full-service” provider — one with broad payer relationships and the capacity to manage a large share of a referral partner’s patients. According to Jacobsmeyer, payer innovation has been the most critical component of Enhabit’s strategy to achieve that objective.
One can also expect that Kinderhook will pursue aggressive growth for Enhabit. Like a can of Red Bull, the capital infusion could give the company “wings.”
The firm’s health care assets have been prolific in terms of roll-up deals. Revere Medical, for instance, has completed eight acquisitions in recent years. Avita has completed six transactions, and Better Health Group has closed 17.
As consolidation — and private equity dollars — continue to transform the hospice landscape, Enhabit will be an interesting company to watch, with new propellants for growth, a new ownership and capital structure and a forthcoming new CEO.