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

Selling your Skilled Nursing Facility (SNF) in Florida presents a significant financial opportunity. The market is active, driven by strong demographic tailwinds and investor interest. However, navigating the state’s unique regulatory landscape and the complexities of the M&A process requires careful planning. This guide provides an overview of the key factors you need to consider to achieve a successful and profitable exit, from understanding market conditions to preparing for what comes after the sale.

Market Overview

The market for Skilled Nursing Facilities in Florida is robust and expanding. Florida’s growing senior population provides a consistent, increasing demand for quality care, making it an attractive location for both regional and national buyers. This demand is bolstered by favorable economic conditions. For instance, recent legislative changes have resulted in a significant 8% increase in Medicaid funding, which can translate to nearly half a million dollars in additional revenue per facility.

Three key factors are driving this positive market environment:
1. Demographic Growth: Florida remains a top destination for retirees, ensuring sustained demand for SNF beds.
2. Increased Funding: The substantial boost in Medicaid rates improves profitability and makes facilities more attractive to sophisticated buyers.
3. Industry Expansion: The overall nursing care industry in the state is on a growth trajectory, expected to reach $9.5 billion in the coming years.

Key Considerations

While the market is strong, a successful sale in Florida requires navigating specific challenges. Unlike other business sales, selling a healthcare facility is a highly regulated process. Overlooking these details can lead to significant delays or even endanger the entire transaction.

Navigating AHCA Regulations

The Florida Agency for Health Care Administration (AHCA) has stringent rules for the transfer of a healthcare license. You must be fully compliant with all state and federal reporting requirements, from incident reports to financial disclosures. Any compliance gaps will be uncovered during due diligence and can negatively impact your valuation.

Financial Preparedness

Buyers and their lenders will scrutinize your financial records. Be prepared with several years of clean, well-organized income and expense statements and balance sheets. We often see that preparing these documents for buyer review is a major hurdle for owners, but it is a non-negotiable step in the process.

The CHOW Process

The Change of Ownership (CHOW) application is a formal process that must be managed carefully. It requires detailed information about the new owner and operational plans to ensure continuity of care.

Market Activity

The Florida SNF market isn’t just growing; it’s incredibly active. Skilled nursing transactions consistently represent a major share of all healthcare deals. In one recent quarter alone, they accounted for over a third of all M&A activity in the senior care space. This high volume is fueled by confident lenders and institutional investors who are actively deploying capital into the state. They see the long-term value in well-run Florida facilities. This isn’t just speculation; the financing deals prove it.

This flood of capital means that qualified buyers are ready and able to complete transactions for attractive facilities.

The Sale Process

Understanding the sale process can make the entire experience feel more manageable. For most SNFs, a transaction takes about four to six months from the decision to sell to the final closing. We think about this journey in a few distinct phases.

Phase 1: Preparation and Valuation

This is where the most important work is done. It involves a thorough evaluation of your operations, financials, and regulatory standing. A comprehensive valuation is performed to establish a credible asking price and strategy. This is also when we address the common objection, “I donBt want to sell right nowmaybe in 22 years.” ThatBs exactly when you should start preparing. Buyers pay for proven performance, not potential.

Phase 2: Confidential Marketing

Your facility is presented to a curated list of qualified buyers under strict confidentiality. The goal is to create a competitive environment with multiple interested parties to drive the best price and terms.

Phase 3: Due Diligence and Negotiation

The top prospective buyers are given access to your detailed information to conduct their due diligence. This is where preparation pays off. A smooth due diligence process leads to a definitive purchase agreement and a clear path to closing.

Valuation

One of the first questions every owner asks is, “What is my facility worth?” While metrics like price per bed (which averaged around $99,200 in a past report) can provide a reference, a true valuation is far more sophisticated. At SovDoc, we use a private equity-grade approach that begins with one key metric: Adjusted EBITDA. This is your Earnings Before Interest, Taxes, Depreciation, and Amortization, “normalized” by adding back owner-specific or one-time expenses to show the true cash flow of the business.

This Adjusted EBITDA is then multiplied by a numberthe valuation multiple. This multiple is not arbitrary; it is determined by several factors:
* Scale of Operations: Larger facilities with higher EBITDA command higher multiples due to lower perceived risk.
* Regulatory & Inspection History: A clean compliance record from AHCA is a major value driver.
* Staffing & Operations: Stable, well-trained staff and efficient operations reduce transition risk for a buyer.
* Real Estate: Whether you own the real estate and its condition significantly impacts the total value.
* Growth Potential: A clear path to increasing occupancy or adding services can earn a premium valuation.

Post-Sale Considerations

Your work is not done the day the deal closes. A well-structured transaction considers your financial future, your legacy, and the transition for your staff and residents. Thinking about these elements ahead of time is critical to a truly successful exit.

Deal Structure & Your Second Bite

Many modern deals are not 100% cash at closing. You may encounter structures like earnouts, where a portion of the payment is tied to future performance, or an equity rollover, where you retain a stake in the new, larger company. A rollover can be powerful, giving you a “second bite of the apple” when the new owner sells again in the future.

Tax Implications

The way your sale is structured has massive implications for your after-tax proceeds. An asset sale versus an entity sale, for example, is treated very differently by the IRS. Proper tax planning with an experienced advisor can dramatically increase the amount you ultimately take home.

Legacy and Transition

For many owners, the facility is more than an asset; it’s a legacy. Protecting your staff and ensuring a smooth transition for residents is a high priority. Finding a buyer whose values align with yours is a key part of the M&A process that we focus on.