As an owner of a hospice or geriatric practice in Utah, you are uniquely positioned in a thriving market. A rapidly aging population and high demand for end-of-life care create a favorable environment for a potential sale. This guide offers a look at the current market, how practices like yours are valued, and the key factors to consider for a successful and profitable transition. Understanding these dynamics is the first step toward realizing the full value of the practice you have built.
Curious about what your practice might be worth in today’s market?
Market Overview
The market for hospice and geriatric services in Utah is not just strong; it’s accelerating. The state’s 65 and older population grew an incredible 53% over the last decade, outpacing the national average significantly. This demographic shift provides a powerful, long-term tailwind for your practice.
What this means for you is sustained, built-in demand. Utah already has one of the highest Medicare hospice utilization rates in the country, with nearly 60% of Medicare deaths occurring under hospice care. This indicates a culture that understands and values the services you provide. Paired with a growing preference for home-based care, the foundation for a successful sale is firmly in place. The question is not whether there are buyers, but how to connect with the right one on the best possible terms.
Key Considerations for Utah Sellers
Beyond the strong market fundamentals, buyers will look closely at the operational health of your practice. Addressing these areas proactively can significantly impact your final valuation.
The For-Profit Trend
A major shift in the hospice sector is the move towards for-profit ownership. Sophisticated buyers, including private equity firms, are actively acquiring practices. They look for well-run businesses with clean financials and a clear path to growth. This means having your financial records in order is more important than ever.
Your Staffing Advantage
In a state with high demand for home health workers, a stable, well-trained, and loyal team is not just an operational asset1 it is a significant valuation driver. Demonstrating low turnover and strong staff satisfaction can directly increase what a buyer is willing to pay.
Regulatory Readiness
Buyers require absolute confidence in your practice’s compliance with all state and federal regulations. A history of clean audits and well-documented compliance procedures can prevent delays during due diligence and build buyer trust.
The due diligence process is where many practice sales encounter unexpected challenges.
Market Activity
While national M&A activity saw a brief slowdown recently, the long-term forecast for hospice is incredibly positive, with a projected annual growth rate of 4.6% through 2030. What we are seeing on the ground is that private equity is the driving force in this space, accounting for about three-quarters of all hospice transactions. These institutional buyers are seeking well-run practices to serve as platforms for growth. For you, this means the potential buyer pool is liquid and motivated. However, it also means you will likely be negotiating with a highly experienced team. Proper preparation and positioning are not just recommended. They are required to level the playing field and achieve a premium outcome.
Timing your practice sale correctly can be the difference between average and premium valuations.
The Sale Process at a Glance
Selling your practice is a structured process, not a single event. While every sale is unique, it generally follows a clear path from preparation to closing. An advisory partner does not just find buyers. We manage the entire process so you can continue running your practice.
Here is a simplified look at the key stages:
| Stage | What It Involves | How an Advisor Helps |
|---|---|---|
| Preparation | Gathering financial data, assessing operations, and defining your goals. | We normalize your financials and craft a compelling growth story. |
| Valuation | Determining the fair market value of your practice. | We use a PE-grade approach to establish a defensible, market-based valuation. |
| Marketing | Confidentially identifying and engaging qualified potential buyers. | We leverage our proprietary buyer database to create a competitive process. |
| Due Diligence | The buyer’s in-depth review of your financials, operations, and legal status. | We manage the data room and anticipate buyer questions to ensure a smooth review. |
| Closing | Finalizing legal documents and transferring ownership. | We work alongside your legal counsel to negotiate final terms and protect your interests. |
Every practice sale has unique considerations that require personalized guidance.
How Your Practice is Valued
Many owners wonder what their practice is truly worth. While you may hear benchmarks like $60,000 per patient, a sophisticated buyer looks deeper. The foundation of modern practice valuation is a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Think of it as your practice’s true cash flow. We start with your net income and add back certain expenses a new owner would not incur, like your personal car lease or an above-market salary. This “normalized” profit figure is then multiplied by a specific number, the valuation multiple, which is determined by factors like your practice’s size, growth rate, and reliance on you as the owner. Most owners are surprised to learn their practice’s Adjusted EBITDA is significantly higher than its reported profit, leading to a much higher valuation than they expected.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
A successful sale is not just about the price. It is about structuring a deal that aligns with your personal and financial goals for the future. The conversation does not end once the price is agreed upon.
Here are a few key post-sale elements to consider:
- Your Ongoing Role: Do you want to leave immediately, or would you prefer to stay on for a transition period? Many deal structures are flexible, but this needs to be defined early.
- The “Second Bite”: Buyers, especially private equity, may offer you the chance to “roll over” a portion of your sale proceeds into equity in the new, larger company. This provides the potential for a second, often larger, payday when the new company is sold again years later.
- Protecting Your Team: The future of your dedicated staff and the legacy of care you have built are valid concerns. The right partner will value your team and culture and see them as a key part of the future success of the practice. We can help you find a buyer whose values align with your own.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What factors make Utah an attractive market for selling a hospice or geriatric practice?
Utah’s hospice and geriatric market is attractive due to a rapidly aging population that grew 53% over the last decade, a high Medicare hospice utilization rate with nearly 60% of Medicare deaths under hospice care, and a strong cultural preference for home-based care. These demographics provide sustained demand and growth opportunities for your practice.
How are hospice and geriatric practices in Utah typically valued for sale?
Valuation is based on Adjusted EBITDA, which reflects the practice’s true cash flow by normalizing profits (adding back expenses like personal car leases). Buyers use valuation multiples based on factors like practice size, growth rate, and owner reliance. This method often results in a higher valuation than just looking at net income or simple benchmarks like $60,000 per patient.
What operational aspects do buyers focus on when evaluating a hospice or geriatric practice in Utah?
Buyers prioritize clean financials with organized records, a stable and well-trained staff with low turnover, and full regulatory compliance with documented clean audits. These operational factors increase buyer confidence, reduce due diligence delays, and can enhance the practice’s valuation.
What role do private equity buyers play in the hospice and geriatric practice market in Utah?
Private equity firms drive about three-quarters of all hospice transactions nationally, and they seek well-run practices as platforms for growth. They favor for-profit models and are experienced negotiators, making proper preparation and positioning essential to achieve premium sale terms in Utah’s competitive market.
What post-sale considerations should sellers of hospice and geriatric practices in Utah keep in mind?
Sellers should plan their ongoing role (immediate exit or transition period), consider equity rollover opportunities for potential future payouts, and ensure the protection of their staff and practice culture with a buyer whose values align. Successful transition planning helps preserve the legacy and future success of the practice.
