Guide to Selling a Skilled Nursing Facilities (SNFs) Practice in Arkansas

If you own a skilled nursing facility in Arkansas, you are navigating a market with unique opportunities and challenges. Selling your practice is one of the most significant financial decisions you will ever make. Understanding the landscape, from local market trends to valuation specifics, is the key to ensuring you achieve optimal timing and maximum value. This guide provides a direct look at what you need to know when considering a sale.

Every practice sale has unique considerations that require personalized guidance.

Arkansas SNF Market: A Brief Overview

The market for skilled nursing facilities in Arkansas is both stable and growing. It presents a clear opportunity for owners who are prepared to sell. Understanding the environment is the first step.

Market Size and Stability

The nursing care industry in Arkansas is significant. It is projected to become a $1.7 billion market by 2025. With approximately 284 facilities statewide, the sector is well established. This size and projected growth signal a healthy and active environment for acquisitions. Buyers are looking for well-run facilities to enter or expand their footprint in this dependable market.

Geographic and Operational Factors

Most of the state’s SNFs are located in Pulaski, Benton, and Washington counties. While the market is strong, owners should know that Arkansas’s facility occupancy rates are often below the national average. This is not necessarily a weakness. For the right buyer, it can signal an opportunity for operational improvement and growth, a key point to highlight during a sale.

Key Considerations for Arkansas SNF Owners

Beyond the general market, what should you focus on within your own practice? Preparing for a sale involves a deep look at your operations and financials. Getting this right before you go to market can significantly change the outcome.

Here are two areas that buyers will scrutinize closely.
1. Regulatory Compliance. In Arkansas, the Department of Human Services and its Office of Long Term Care (OLTC) oversee licensing. Any compliance issues, documented on public Form 2567 reports, will be a major focus for buyers. A clean record can strengthen your negotiating position, while a history of violations can lower your valuation. Addressing these items proactively is a critical pre-sale step.
2. Financial Preparedness. Your financial records must be clean, organized, and ready for due diligence. Buyers don’t just look at your net income. They perform a detailed analysis to calculate an “Adjusted EBITDA,” which becomes the foundation of your practice’s valuation. We find that many owners are surprised by what buyers add back or disallow. Proper preparation here is not just about bookkeeping. It is about presenting your profitability in the most accurate light.

Understanding your practice’s current market position is the first step toward a successful transition.

What Recent Market Activity Tells Us

The Arkansas SNF market is not just theoretically attractive. It is an active M&A environment. We see both large portfolios and individual facilities changing hands, which shows interest from different types of buyers, from institutional REITs to regional operators.

While many larger transactions remain private, public data gives us a window into market values.

An interesting trend has also emerged. Facilities with lower star ratings have been selling at a higher rate than top-rated ones. This suggests that buyers are actively seeking value-add opportunities where they can invest in improving quality and operations. For owners, this means that your facility does not need to be perfect to attract strong buyer interest. It is more about finding the right buyer who sees the potential in what you have built.

What to Expect During the Sale Process

Selling a medical practice is not a single event. It is a structured process with distinct phases. Running a confidential and competitive process is the best way to protect your interests and achieve the highest value. While every deal is unique, the journey generally follows these steps:

1. Preparation and Valuation. This is the foundational work. It involves getting your financial and operational documents in order and completing a comprehensive valuation to set a realistic and defensible asking price.
2. Confidential Marketing. Your advisor will create marketing materials that tell your practice’s story. They will then discreetly approach a curated list of qualified buyers without revealing your identity.
3. Negotiation. Multiple interested buyers create competitive tension. This is where you negotiate the high-level terms of the deal, which are captured in a Letter of Intent (LOI).
4. Due Diligence. Once an LOI is signed, the buyer conducts a deep dive into your financials, operations, and compliance records. This is where many deals encounter unexpected challenges. Thorough preparation is key.
5. Closing. After a successful due diligence period, final legal documents are drafted and signed, and the transaction is closed.

Protecting your confidentiality while exploring sale options is critical.

How Your SNF Will Be Valued

One of the first questions any owner asks is, “What is my practice worth?” The answer is more complex than a simple rule of thumb. Professional buyers use a specific methodology to determine value, and understanding it is key. It is less about what you think it is worth and more about what the market is willing to pay based on verifiable performance.

Your True Profitability (Adjusted EBITDA)

Buyers start by calculating your facility’s Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is not the same as the net income on your tax return. It is a normalized figure that adds back owner-specific expenses, such as an above-market salary or personal vehicle costs. The goal is to reflect the true, ongoing cash flow of the business. Most practices are undervalued until this number is properly calculated.

Your Market Multiple

Once a buyer determines your Adjusted EBITDA, they apply a multiple to it to arrive at your enterprise value. This multiple is not a fixed number. It is influenced by several factors, including your facility’s size, occupancy trends, staff stability, regulatory history, and growth potential. A facility with a strong management team and clear opportunities for growth will command a higher multiple than one that is heavily dependent on the owner’s daily presence.

A comprehensive valuation is the foundation of a successful practice transition strategy.

Planning for Life After the Sale

The transaction itself is not the end of the story. A successful exit involves careful planning for what comes next for you, your legacy, and your team. These considerations should be part of the discussion from the very beginning, as they can be built directly into the deal structure.

1. Your Role and Legacy. Do you want to retire immediately, or would you prefer to stay on for a transition period? For many owners, the fear of losing control is a major concern. A good deal can be structured to give you a continued strategic role, often through rollover equity, allowing you to participate in the future success of the combined company.
2. Deal Structure and Payout. The final sale price is only part of the equation. How you receive that money matters. The structure of your sale has major implications for your after-tax proceeds. Deals can include cash at close, an earnout based on future performance, and rollover equity. Each has different risk and reward profiles that need to be modeled.
3. Your Staff and Community. You have likely spent years building a dedicated team and a reputation in your community. Finding a buyer who respects that culture and plans to invest in your staff is a non-negotiable for most owners we work with. This is about more than money. It is about ensuring the long-term well-being of the practice you built.

Not sure if selling is right for you? Our advisors can help you understand your options without any pressure.