An Indiana home health agency sold for $22M at 6x EBITDA, one of the largest healthcare deals on our record. Home health is one of the most active acquisition markets in lower-middle-market healthcare, and well-run agencies with clean compliance histories draw interest from private equity platforms, regional operators and health systems.
Buyers review survey results, any plans of correction and billing audit history early. A clean record shortens diligence and protects the multiple.
Hospital, physician and discharge planner relationships held by a team, not one person, are what make revenue transferable.
A steady or rising census and a healthy mix of Medicare, Medicaid and commercial payers are central to how an agency is valued.
Nurse and aide retention is the most common operational question buyers ask. Low turnover and a strong clinical manager raise confidence in the numbers.
Medicare change of ownership rules affect deal structure and timing. Agencies that plan for them before going to market avoid delays at closing.
We start with a valuation grounded in closed deals, then recast the financials and build the confidential information memorandum buyers will review.
The business is presented anonymously to qualified buyers from our network of 8,000+ and on major marketplaces. Buyers sign an NDA before they learn the name.
We run several buyers through the process at the same time, so letters of intent arrive close together and price is set by competition.
We manage diligence requests, keep the deal on schedule and work with the owner's attorney and CPA through closing.
Home health agencies are usually valued as a multiple of EBITDA. The two home health agencies on our closed record sold at 5x and 6x EBITDA, for $11M in Arizona and $22M in Indiana. Size, payer mix, census trend, compliance history and how dependent referrals are on the owner all move the multiple.
Private equity backed home health platforms, regional and national operators expanding into new states, hospital systems and, for smaller agencies, individual healthcare operators. A competitive process puts several of these buyer types in front of the same agency.
Most of our transactions close in 6 to 9 months, and most clients receive a letter of intent within 60 days. Healthcare deals can take longer when Medicare change of ownership approvals or state licensing transfers are involved.
You do not have to use one, but home health buyers expect clean financials, a prepared data room and answers to compliance questions from day one. An advisor who has closed healthcare deals prepares that before buyers see it and runs several buyers at once so the price is set by competition.
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