An insider’s look at market trends, valuation drivers, and strategic preparation for practice owners.
The market for Applied Behavior Analysis (ABA) therapy in Indiana is growing, creating significant opportunities for practice owners considering an exit. Selling your school and community-based practice is a major decision that goes beyond a simple transaction. It involves understanding market dynamics, preparing your operations, and telling a compelling story to the right buyers. This guide provides a clear overview of the current landscape to help you navigate the process and achieve your financial goals.
A Market Poised for Growth
Indianas ABA market is not just stable; it is expanding rapidly. This growth is driven by increasing awareness of ASD and significant state-level investment, creating a favorable environment for sellers. Understanding these tailwinds is the first step in positioning your practice for a premium valuation.
National Demand and State Investment
The U.S. market for ABA services is strong, valued at over $4 billion and projected to grow steadily. More importantly, Indiana has shown a massive commitment to these services. State Medicaid spending on ABA therapy surged from just $14.4 million in 2017 to over $639 million in 2023. This tells buyers one thing: the demand is real, and the payment infrastructure is robust.
The 2025 Medicaid Policy Shift
A key factor for buyers is Indiana’s updated Medicaid policy, which takes effect on April 1, 2025. It introduces a tiered reimbursement system based on a child’s needs. Practices that can demonstrate how their operational and clinical models align with this new structure will be viewed as more sophisticated and lower-risk investments.
Key Considerations for Indiana ABA Sellers
Beyond market trends, buyers are looking at the specific strengths within your practice. They want to see more than just revenue. They are acquiring your operational maturity and your track record of clinical quality. Your ability to demonstrate streamlined intake processes, a strong leadership team of BCBAs, and a robust compliance program is critical. In Indiana, it’s also valuable to show how you’ve addressed the state’s unique service gaps, perhaps through a mix of school-based contracts, community partnerships, or telehealth. These elements prove your practice is not just profitable but also sustainable and scalable.
What We’re Seeing in the Market
The growth in Indiana’s ABA sector has not gone unnoticed. We are seeing a high level of M&A activity from both private equity groups and larger strategic providers looking to expand their footprint. These buyers are sophisticated and move quickly when they find the right opportunity. A practice that is “doing fine” today may miss a premium valuation window tomorrow.
Here is what buyers are prioritizing in 2024:
1. Diversified Service Models: Practices that blend school, center, and community-based services are highly attractive because they show multiple, stable revenue streams.
2. Clean Financials: Buyers pay a premium for clarity. Having three years of clean, accrual-based financial statements ready for review signals a well-run business.
3. Strong Clinical Leadership: A practice that can run without the owner’s constant clinical supervision is seen as a more valuable and transferable asset.
4. Demonstrated Compliance: With evolving regulations, a documented history of compliance with BACB standards and state rules is not just a plus, it’s a requirement.
Navigating the Sale Process
Selling your practice is a structured project, not a single event. It begins long before a buyer is involved. The first step is a confidential valuation to understand what your practice is worth today. From there, we help you prepare your financial and operational documents to present a clear and compelling story. We then identify and confidentially approach a curated list of qualified buyers to create a competitive environment. This leads to negotiation, where we structure a deal that aligns with your goals. The final stage is due diligence, where the buyer verifies all information. Proper preparation here is what separates a smooth closing from a failed transaction.
How Your ABA Practice is Valued
Your practice’s value is not just your net income. Sophisticated buyers use a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This starts with your profit but adds back owner-specific expenses and one-time costs to show the true cash flow of the business. For example, an owner’s excess salary or personal car lease would be added back, increasing the final number. This Adjusted EBITDA figure is then multiplied by a number (the “multiple”) to determine the enterprise value. The multiple itself is not random. It is influenced by specific risk and growth factors. Many owners are surprised to learn their practice is worth more than they assumed once it’s valued correctly.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | Owner is the primary clinician | Associate-driven, low owner reliance |
| Service Mix | Single service (e.g., in-home only) | Diversified (school, center, community) |
| Geographic Reach | Single urban or rural location | Covers multiple regions, uses telehealth |
| Financial Records | Cash-basis, messy books | Accrual-basis, clean, monthly statements |
Planning for What Comes Next
The transaction is just the beginning of your next chapter. It’s important to think about your role after the sale. Do you want to stay involved clinically or in a leadership capacity, or are you planning a clean exit? Your goals here will help shape the type of buyer and deal structure we pursue. The structure itself is critical, as it directly impacts your after-tax proceeds. Furthermore, a well-managed transition protects your legacy and ensures your dedicated staff are set up for success under new ownership. Thinking through these details beforehand is the key to a transition that you can feel good about long after the deal has closed.
Frequently Asked Questions
What factors are driving the growth of the ABA market in Indiana?
The ABA market in Indiana is growing rapidly due to increased awareness of Autism Spectrum Disorder (ASD) and significant state-level investment, including a large increase in Medicaid spending on ABA therapy from $14.4 million in 2017 to over $639 million in 2023.
How does the 2025 Medicaid policy change in Indiana affect ABA practices?
Starting April 1, 2025, Indiana’s Medicaid will implement a tiered reimbursement system based on a child’s needs. ABA practices that align their operations and clinical models with this new policy will be seen as more sophisticated and lower-risk investments by buyers.
What operational aspects do buyers prioritize when purchasing a school and community-based ABA practice?
Buyers look for operational maturity, clinical quality, streamlined intake processes, strong leadership teams of Board Certified Behavior Analysts (BCBAs), robust compliance programs, and evidence that the practice addresses Indiana’s unique service gaps such as school contracts, community partnerships, or telehealth.
How is the value of an ABA practice determined?
The value is typically based on Adjusted EBITDA, which is your practice’s profit plus add-backs for owner-specific expenses and one-time costs, reflecting true cash flow. This figure is multiplied by a valuation multiple influenced by factors like provider model, service mix, geographic reach, and financial record quality.
What should practice owners consider about their role and goals after selling their ABA practice?
Owners should decide if they want to remain involved clinically or in leadership roles, or exit completely. Their post-sale goals influence the buyer type and deal structure, which impacts after-tax proceeds and transition success. Planning for staff stability and legacy protection is also key for a smooth handover.
