Guide to Selling a Hospice & Geriatric Practice in Minneapolis, MN

The Minneapolis market for hospice and geriatric care is strong, driven by significant demographic tailwinds. The state’s rapidly aging population creates a clear and growing demand for your services. For practice owners, this presents a unique window of opportunity. However, turning this market potential into a successful sale requires careful planning and a deep understanding of today’s acquisition landscape. This guide provides key insights to help you navigate the process.

Market Overview

If you are a hospice or geriatric practice owner in Minneapolis, the market dynamics are firmly in your favor. This isn’t just a temporary trend. It is a fundamental demographic shift creating sustained, long-term demand for the essential care you provide. Buyers, from strategic health systems to private equity groups, are acutely aware of these trends and are actively seeking opportunities in the region.

A Rapidly Aging Population

Minnesota’s population of adults aged 65 and older is growing quickly, and it’s projected to outnumber the school-aged population for the foreseeable future. The 85+ demographic, a key driver for hospice and geriatric services, is expected to triple in the coming decades. This creates a predictable and expanding patient base that is very attractive to potential acquirers.

High Demand for Home-Based Care

The market is also seeing a clear preference for home-based care models. The demand for services that allow older adults to age in place is increasing, while traditional nursing care capacity faces constraints. Practices that have established efficient at-home service delivery are particularly well-positioned in the current M&A environment. This is a powerful part of your story.

Key Considerations

Beyond the strong market demand, acquirers look closely at the operational and regulatory health of your practice. Your patient census is a primary driver of value, but it must be supported by a foundation of compliance and stability. In Minnesota, hospice providers must be licensed by the MDH and Medicare-certified. It’s important to know that these licenses are not transferable, which adds a layer of complexity to any transaction structure that requires careful navigation. Furthermore, new CMS regulations, like the 36-month rule preventing ownership changes shortly after enrollment, can impact your timing and options. Getting these details right is not just about passing due diligence. It’s about protecting and maximizing your practice’s value.

Market Activity

The Minneapolis and greater Minnesota market isn’t just theoretically attractive; it’s a hotbed of M&A activity. Recent transactions show a clear pattern of consolidation and strategic acquisitions by both large non-profits and for-profit consolidators. When major players like the Mayo Clinic Health System and Hennepin Healthcare make strategic moves in the hospice space, it signals a healthy and dynamic market.

Here’s what the current activity tells us:
1. Strategic Buyers Are Active. Local and national groups, like the Minnesota-based St. Croix Hospice, are actively acquiring to build scale and geographic density.
2. Health Systems Are Optimizing. Large health systems are choosing to partner with or transfer services to specialized hospice providers, creating opportunities for well-run independent practices to be the solution.
3. Timing is a Factor. With this level of activity, understanding the shifting landscape and timing your entry into the market can have a significant impact on your outcome.

Sale Process

Many owners think selling a practice starts when they decide to list it. In our experience, a successful sale begins years earlier. The process isn’t just about finding a buyer; it’s about building a compelling case for your practice’s value. It starts with deep preparation, from cleaning up your financial statements to ensuring all your compliance documents are in order. Only then can a proper valuation be established. From there, we confidentially approach a curated list of qualified buyers to create a competitive environment. The most critical stage is often due diligence, where the buyer scrutinizes every aspect of your operation. This is where preparation pays off, preventing surprises that can derail a deal or lower the price. A well-managed process ensures you reach the closing table on your terms.

Valuation

How much is your hospice or geriatric practice worth? You may hear rules of thumb, like a certain amount per patient or a multiple of your earnings. While metrics like patient census and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) are the foundation, they are just the starting point. Sophisticated buyers don’t just buy your past performance; they buy your future potential and stability. A true valuation involves a deep analysis to calculate your Adjusted EBITDA, which accounts for owner-specific expenses and one-time costs to show the real profitability of the business. The valuation multiple applied to that number is not one-size-fits-all. It depends on several factors.

Getting an accurate valuation is the critical first step in any exit strategy.

Post-Sale Considerations

The transaction is not just about the final sale price. It’s about your future and the legacy you’ve built. A critical part of our job is to find a partner who will be a good steward for the practice and its employees. For many owners, the fear of losing control or seeing their culture change is a major concern. The good news is that control is not an all-or-nothing proposition. We can structure deals that allow you to maintain a significant role, either through a continued leadership position, a strategic partnership, or by rolling a portion of your equity into the new entity. This gives you a “second bite at the apple” when the new, larger company is sold again. Planning for these post-sale realities is just as important as negotiating the price.