PE is dumping billions into home care despite 79% caregiver turnover. Heres why.

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by a searcher from State University of New York at Stony Brook
in Danville, CA, USA

2h ago

PE is dumping billions into home care despite 79% caregiver turnover. Heres why.

Caregiver turnover in home care averages 79%. By any normal operating standard, that's a broken business. Yet PE accounted for 50-60% of all home care M&A inredactedWaud Capital built a multi-state platform, Addus dropped $350M on Gentiva's personal care division, UnitedHealth closed $3.3B for Amedisys, and Kinderhook is buying Enhabit for $1.1B. Why? The demographic math is undeniable: 60 million Americans are 65+, heading to 77 million byredactedThe boomer wave hits theredactedcohort (when home care utilization spikes) between 2026 andredactedRecession-proof demand on a fixed timeline. The arbitrage for searchers: non-medical personal care agencies trade at 2.5x-3.5x SDE at the $1M-$5M revenue level. PE platforms exit at 7x-15x EBITDA. That spread exists because of one thing: the labor problem. And the operators who've cracked it aren't doing anything exotic: Agencies paying above the 75th percentile wage ($40K vs. the $35K median) see 35% lower turnover 4 of 5 departing caregivers leave in the first 100 days. Fix onboarding and the rest follows Best operators run 30-40% turnover vs. the 79% average. That's the moat. The one diligence metric that separates premium from discount deals: payer mix. Operators with 30%+ private-pay or Medicare Advantage revenue command a 0.5x-1.0x multiple premium over Medicaid-dependent shops.

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