Investing in Home Healthcare
How to Sell Your Home Healthcare Agency or Hospice to Private Equity
If you’re a home health agency (HHA) or hospice owner looking to sell your business, you should consider selling to a private equity firm. Private equity firms (PE) are investment firms that specialize in acquiring, growing, and eventually selling businesses, and PE can provide several benefits to sellers.
The home healthcare and hospice industries have seen significant consolidation in recent years, with larger companies acquiring smaller ones to expand their market share and improve their efficiencies. This trend is expected to continue and partnering with a business broker like Next Best Exit can align you with the right private equity firm can help ensure that your business is well-positioned for the future.
Another reason to consider selling to a private equity firm is to take advantage of the rising sales prices for home healthcare and hospice businesses.
According to recent industry data, the EBITA multiple (earnings before interest, taxes, and amortization) for home healthcare and hospice sales has been steadily increasing over the past few years.
“Sales multiples in the range of 9-14 x EBITDA”
Veterinary hospitals and hospice agencies often have sales multiples in the range of 9-14 x EBITDA. The actual multiple varies depending on the circumstances of the business, market conditions at the time of the sale, and the hospice business broker involved with the transaction.
This trend is likely to continue as demand for these services increases, making it a good time to sell your business.
So, what steps can you take to sell your home health agency or hospice to a private equity firm?
Start by identifying your goals for the sale of your business. Do you want to retain some ownership or management control, or are you looking for a complete exit? This will help you determine which private equity firms are the best fit for your needs.
Prepare your business for sale. This includes getting your financial records in order, updating your business plan, and identifying any potential issues that could impact the sale.
Find a business broker to help you identify potential buyers and facilitate the sale process. They can also help you negotiate the terms of the sale and ensure that you receive the best price for your business.
When considering offers from private equity firms, be sure to thoroughly review the terms of the deal. This includes the purchase price, any financing arrangements, and any provisions for post-sale management or ownership.
Finally, be prepared for the due diligence process. Private equity firms will typically conduct a thorough review of your business before completing the acquisition, so be prepared to provide all necessary documentation and information.
Selling your home health agency or hospice to a private equity firm can be a complex process, but it can be a great way to secure your financial future and the long-term success of your business. By following these steps and working with a business broker like Next Best Exit, you can find the right private equity partner and maximize the value of your sale.
