Selling your Skilled Nursing Facility in New Hampshire presents a unique set of challenges and opportunities. The state’s aging population fuels demand, but this is layered against intense financial and operational pressures. Understanding this landscape is the first step toward a successful sale. This guide offers a clear overview of the market, key considerations for owners like you, and the steps involved in achieving your financial goals.
Protecting your confidentiality while exploring sale options is critical.
Market Overview
The market for Skilled Nursing Facilities in New Hampshire is a story of contrasts. On one hand, a rapidly aging population means the need for long-term care is strong and growing. On the other hand, the state is seeing a significant number of facility closures. This is driven by deep financial pressures, including workforce shortages and Medicaid reimbursement rates that do not cover operating costs. In 2021, the average New Hampshire SNF lost over $74 per patient day. This tightening market creates a challenging environment. It also means that for well-run facilities, or those with a clear path to profitability, buyer interest can be strong.
Key Considerations for Sellers
When preparing to sell your SNF, buyers will focus intensely on a few key areas. Being prepared is critical for a smooth process and a strong valuation.
Regulatory Compliance is Non-Negotiable
Your facility’s compliance history will be under a microscope. Buyers and the New Hampshire Department of Health and Human Services (DHHS) will review your licenses, past survey results, and plans of correction. A clean record is a major asset. Any outstanding deficiencies should be addressed before you go to market. A change of ownership itself triggers a DHHS notification and inspection, so your operational house must be in order.
Proactive Staffing and Financial Strategy
The two biggest hurdles for New Hampshire SNFs are staffing and financial performance. You must have a clear story for both. With new federal staffing rules requiring a 24/7 RN on duty, you need a defensible plan for recruitment and retention. Likewise, even if your facility operates at a loss on paper, you need to present transparent financials that show a clear path to profitability for a new owner.
Market Activity
Despite the operational headwinds, deal activity for New Hampshire SNFs continues. We see both regional and national buyers looking for strategic opportunities in the state. Transactions like the recent sale of the 62-bed Derry Center for Rehabilitation & Healthcare show that the M&A market is moving. However, sale prices are almost always kept confidential. This means you cannot rely on public information to understand your facility’s value. The key is to run a process that creates a competitive environment among a curated list of qualified buyers, rather than waiting for a single, unsolicited offer.
The Sale Process
A successful sale does not happen by accident. It follows a structured, confidential process designed to protect your interests and maximize value. While every transaction is unique, the journey typically involves these major steps:
1. Preparation and Valuation. This is the foundational phase. We work with you to analyze your operations, normalize financials, and determine a realistic market value. This is also when we assemble all the documents a buyer will need to review.
2. Confidential Marketing. Your facility is presented anonymously to a pre-vetted list of strategic and financial buyers. We manage all communications to protect your confidentiality and create competitive tension.
3. Due Diligence. The selected buyer conducts an exhaustive review of your facility’s legal, financial, and operational health. Proper preparation here is critical. It can prevent surprises that might derail a transaction or lower the price.
4. Closing and Transition. We help negotiate the final purchase agreement and work with legal counsel to ensure a smooth closing and transition of ownership to protect your staff and residents.
The due diligence process is where many practice sales encounter unexpected challenges.
Determining Your Facility’s Value
Many New Hampshire SNF owners believe their facility has little value because it shows a loss on the income statement. This is often incorrect. Sophisticated buyers value a facility based on its normalized cash flow, or Adjusted EBITDA, not its reported net income. We calculate this by taking your reported earnings and adding back expenses that a new owner would not incur. These can include your personal salary above a standard administrator’s wage, personal vehicle expenses, or other one-time costs. This adjusted number reveals the true cash-generating potential of the facility. A valuation multiple is then applied to this figure to determine the enterprise value. Getting this calculation right is the foundation of a successful sale.
Post-Sale Considerations
The work is not over once you agree on a price. How the deal is structured and what happens after closing will define your ultimate success. Planning for these factors from the beginning is critical.
| Consideration | Why It Matters for You |
|---|---|
| Sale Structure | The deal can be structured to have major implications for your after-tax proceeds. Planning this properly can save you a significant amount of money. |
| Your Transition Role | Buyers often require a transition period. Defining your role, responsibilities, and timeline upfront protects your time and ensures a smooth handover. |
| Earnouts & Rollovers | A portion of your payment might be tied to future performance (earnout) or you may retain ownership equity (rollover). This can increase your total compensation but requires careful negotiation. |
| Legacy & Staff | Finding a buyer who respects your legacy and is committed to your staff is a non-financial goal for many owners. This should be a key part of the buyer selection criteria. |
Every sale is different. Your personal and financial goals should drive the entire strategy, from valuation to the final handshake.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What are the main challenges when selling a Skilled Nursing Facility in New Hampshire?
The main challenges include intense financial and operational pressures such as workforce shortages, Medicaid reimbursement rates that often don’t cover costs, and a tightening market with many facility closures. However, a well-run facility with a clear path to profitability may still attract strong buyer interest.
Why is regulatory compliance critical when selling an SNF in New Hampshire?
Regulatory compliance is non-negotiable because buyers and the New Hampshire Department of Health and Human Services (DHHS) will scrutinize your licenses, past survey results, and correction plans. A clean compliance record is a major asset, and any deficiencies should be resolved before listing the facility. A change of ownership automatically triggers DHHS notification and inspection.
How is the value of a Skilled Nursing Facility determined in New Hampshire?
The value is typically based on the normalized cash flow or Adjusted EBITDA rather than the facility’s reported net income. This involves adding back certain expenses that a new owner wouldn‚Äôt incur, such as above-market salaries or one-time costs, to reveal true cash-generating potential. Then a valuation multiple is applied to this adjusted figure to determine the enterprise value.
What does the sale process for an SNF in New Hampshire usually involve?
The sale process generally follows these steps: 1) Preparation and valuation with financial normalization and document assembly; 2) confidential marketing to a vetted list of buyers; 3) buyer due diligence focusing on legal, financial, and operational health; and 4) closing and transition, including legal support for ownership transfer and staff protection.
What are important post-sale considerations for SNF owners in New Hampshire?
Key post-sale considerations include structuring the deal to optimize after-tax proceeds, defining your transition role and timeline, negotiation of earnouts or rollovers which tie payment to future performance or equity retention, and ensuring the buyer respects your legacy and commitment to staff for a smooth handover.