The market for ABA therapy practices in Denver is active, presenting a significant opportunity for owners considering their next chapter. Driven by national growth and strong local demand, buyers are actively seeking quality practices. However, navigating the sale involves understanding Denver’s unique operational challenges and positioning your practice to attract premium valuations. This guide provides the insights you need to prepare for a successful transition.
Market Overview
Your practice operates within a dynamic environment. Understanding the broader trends and the specific local factors is the first step in positioning for a successful sale.
National Tailwinds
The demand for ABA therapy is not just growing. It is accelerating. The U.S. market was valued at $4 billion in 2023 and is expected to expand significantly through 2032. This powerful national trend is driven by a greater awareness and diagnosis of Autism Spectrum Disorder (ASD), creating a large and receptive audience of buyers, from national platforms to private equity groups, looking for well-run practices.
Denver’s Local Landscape
Here in Denver, we see that same strong demand. At the same time, we know local challenges are real. Many practice owners have dealt with operational costs rising by nearly 30% and have navigated complex Medicaid reimbursement rates. The good news is that recent legislative action delivered an emergency 20% funding increase, improving the financial outlook. A buyer will want to see how you have managed these local factors effectively.
Key Considerations
When a potential buyer looks at your Denver ABA practice, they are buying more than your patient list. They are buying your operations. Proving your practice’s health means showcasing strong financial diligence that effectively manages rising costs. It means demonstrating a stable and supported clinical team, which directly counters the industry-wide concern of staff burnout. Finally, it requires showing robust payer relationships and contracts that reflect the recent positive adjustments in Colorado’s reimbursement landscape. Getting these three areas right is how you transform your practice from just another listing into a premium acquisition target.
Market Activity
The theory of a strong market is proven by real-world activity. Both strategic buyers and private equity groups are actively investing in Colorado’s ABA space, confirming that a well-positioned practice is a highly sought-after asset. The activity isn’t just happening, it’s accelerating.
Just look at some of the recent moves in our state:
1. BlueSprig Pediatric, a major national player, acquired Lakewood’s own Trumpet Behavioral Health, a landmark deal that added 37 locations to its platform.
2. ABA Connect expanded its Colorado footprint by acquiring Bright Behavior in Colorado Springs.
3. Behavioral Framework grew through its acquisition of Behavior Consultation & Psychological Services (BCPS).
This consolidation signals a healthy, active M&A environment. Buyers are here, and they are ready to transact.
The Sale Process
Selling your practice is a structured journey, not a single event. It begins with Preparation, where we help you organize your financials and articulate your practice’s growth story. This leads to a formal Valuation to establish a credible asking price. From there, we begin a confidential marketing process to identify and engage the right buyers without disrupting your staff or patients. Once a promising offer is on the table, the most critical phase begins: Due Diligence. This is where buyers scrutinize every aspect of your business. Many deals falter here due to poor preparation. With proper guidance, you can anticipate requests and navigate this stage smoothly, leading to a successful Closing that meets your financial and legacy goals.
Your Practice’s Valuation
Determining what your ABA practice is worth goes beyond a simple revenue calculation. Sophisticated buyers focus on a key metric: Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, with “adjustments” made for any owner-related expenses or one-time costs to show the true, ongoing profitability of the business. This Adjusted EBITDA figure is then multiplied by a number, the “multiple,” to arrive at your practice’s enterprise value. That multiple isn’t random. It’s influenced by several key factors.
| Valuation Factor | How It Increases Your Multiple |
|---|---|
| Scale & Profitability | Practices with higher Adjusted EBITDA are seen as less risky and command higher multiples. |
| Provider Model | A practice that doesn’t rely solely on the owner is more valuable and transferrable. |
| Growth Story | Demonstrating a clear path for future growth brings a premium from buyers. |
| Payer Mix | A healthy mix of stable insurance contracts, including well-managed Medicaid, is attractive. |
Getting this right is the difference between an average outcome and a premium one. An expert valuation uncovers the true potential of your practice.
Post-Sale Considerations
The transaction itself is not the end of the journey. A successful exit strategy considers what happens the day after you sell. For many owners, this involves a planned transition period where you continue to lead clinically, ensuring a smooth handover for your team and patients. For others, its about structuring the deal to protect your financial future. This could involve an equity rollover, where you retain a stake in the larger, growing company, giving you a potential second major payday down the road. The right deal structure protects your legacy, provides for your staff, and ensures you dont leave money on the table. Its about more than selling. Its about transitioning on your terms.
Frequently Asked Questions
What is driving the demand for ABA therapy practices in Denver, CO?
The demand for ABA therapy practices in Denver is driven by national growth trends and strong local demand. Increased awareness and diagnosis of Autism Spectrum Disorder (ASD) have expanded the market nationally, valued at $4 billion in 2023, while local factors such as recent legislative funding increases and ongoing Medicaid reimbursement improvements also support demand.
What are the key factors buyers consider when purchasing a Denver ABA therapy practice?
Buyers focus on three main areas:
– Financial diligence: Managing rising operational costs effectively.
– Clinical team stability: Demonstrating a supported team to counteract staff burnout.
– Payer relationships: Showing strong contracts and positive adjustments in reimbursement rates, especially with Medicaid.
How is the valuation of a ABA therapy practice in Denver determined?
Valuation is based primarily on the practice’s Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for owner-related expenses and one-time costs). This figure is multiplied by a multiple influenced by factors such as scale and profitability, provider model independence, growth potential, and the quality of payer mix.
What are some recent market activities indicating a strong M&A environment for ABA therapy practices in Colorado?
Recent activities include national and regional acquisitions such as BlueSprig Pediatric acquiring Trumpet Behavioral Health (adding 37 locations), ABA Connect acquiring Bright Behavior in Colorado Springs, and Behavioral Framework acquiring Behavior Consultation & Psychological Services (BCPS). These consolidations show active buyer interest and a healthy market.
What post-sale considerations should an owner of a Denver ABA therapy practice keep in mind?
Post-sale planning is crucial and may include:
– A transition period where the owner stays involved clinically to ensure smooth handover.
– Structuring the deal to protect financial interests, such as through an equity rollover to retain a stake in the larger company.
– Planning the exit strategy to protect legacy, staff, and maximize financial outcomes.