Selling the ABA therapy practice you have built is a major decision. The current market for pediatric and behavioral health practices is active, presenting a significant opportunity for owners in New Hampshire. A successful sale, however, depends on much more than just finding a buyer. It requires careful preparation, strategic positioning, and a clear understanding of your practice’s true value. This guide provides a direct overview of what you need to know.
Market Overview
The national market for Applied Behavior Analysis (ABA) therapy is strong, valued at $4 billion and projected to grow. This growth has attracted significant interest from buyers, including private equity firms and larger healthcare networks, who are actively seeking high-quality practices. They are looking for established operations with solid financial performance and strong clinical teams.
National Demand
Investors see the long-term value in the ABA sector. Recent trends show renewed acquisition activity, with buyers paying close attention to practices that have proven, stable business models. This creates a competitive environment, which can be a great advantage for a well-prepared seller.
The New Hampshire Advantage
Your location in New Hampshire offers a distinct benefit. The state has favorable insurance laws that mandate meaningful coverage for autism services, including ABA therapy. This provides a stable and predictable revenue foundation that is very attractive to potential buyers.
* Ages 0-12: Coverage is required up to $36,000 annually.
* Ages 12-21: Coverage is uncapped.
This regulatory support reduces investment risk and can directly increase the perceived value of your practice.
Key Considerations
Beyond the numbers, sophisticated buyers evaluate the durability of your practice. They want to see a business that runs efficiently and can thrive beyond your direct involvement. This means having a strong clinical and administrative leadership team in place is a major factor. Buyers are purchasing a future, and a capable team that can ensure continuity of care assures them of that future.
In New Hampshire, while there is no state-specific licensure for behavior analysts, adherence to national standards is critical. Buyers will verify that your clinical staff holds the necessary certifications from the Behavior Analyst Certification Board (BACB), as this is a requirement for insurance reimbursement. Proving you have a robust compliance program for both BACB ethics and HIPAA is not just a formality; it is a core component of your practice’s value.
Market Activity
The current M&A market is active, but buyers have become more selective. Rising interest rates and operational costs mean that acquirers are focusing their attention on top-tier practices with strong fundamentals. This is not a time for “potential”; it is a time for proven performance.
We see that buyers are consistently prioritizing a few key areas:
1. Clear Profitability: Your financial records must show consistent, predictable profit. This is typically measured by Adjusted EBITDA, not just the net income on your tax return.
2. Operational Strength: Buyers look for streamlined intake processes, effective staff utilization (like BCBA supervision ratios), and low patient cancellation rates.
3. A Business, Not a Job: The less the practice relies on you, the owner, for daily operations and patient relationships, the more valuable it is.
If your practice demonstrates these qualities, you will be in a strong position to attract multiple competitive offers.
Timing your practice sale correctly can be the difference between average and premium valuations.
Sale Process
From the decision to sell to the final closing, the process typically takes longer than many owners expect. You should plan for at least four to six months of preparation before your practice is even presented to potential buyers. Once you accept an offer and sign a Letter of Intent (LOI), the buyers due diligence process can easily take another 90 days. During this phase, every aspect of your business, from financial records and contracts to compliance and HR files, will be intensely reviewed. Any surprises or inconsistencies discovered here can delay or even derail a deal. Running a structured process with an experienced guide is the best way to anticipate buyer requests, manage the timeline, and maintain negotiating leverage.
Valuation
What is your ABA practice actually worth? The value is not based on revenue or assets alone. The industry standard is a multiple of your practices Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Adjusted EBITDA gives a clearer picture of your practice’s true cash flow by adding back owner-specific and one-time expenses. For example, a practice needs to show how its profit changes if the owner’s salary is normalized to a market rate.
Here is a simplified look at how this works:
| Line Item | Amount | Explanation |
|---|---|---|
| Reported Net Income | $300,000 | Your “bottom line” profit. |
| Owner Salary Add-Back | +$75,000 | The portion of your salary above a standard manager’s rate. |
| One-Time Legal Fees | +$15,000 | An expense not expected to recur next year. |
| Adjusted EBITDA | $390,000 | This is the number buyers will apply a multiple to. |
The multiple itself depends on factors like your practice’s size, growth rate, payer mix, and how dependent it is on you. Understanding these factors is the first step toward achieving a premium valuation.
Curious about what your practice might be worth in today’s market?
Post-Sale Considerations
The conversation does not end when the deal closes. You need to plan for what comes next. Most buyers will want you to remain involved for a transition period, which could range from a few months to a couple of years. Your role could be focused on clinical oversight, business development, or ensuring a smooth handover of key relationships. The terms of this role, along with any non-compete clauses that may restrict your future work, are critical points of negotiation. Planning for this early in the process ensures your personal and financial goals are protected, and that the legacy you built for your patients and staff is secure for the future.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What makes New Hampshire an advantageous location for selling an ABA therapy practice?
New Hampshire offers favorable insurance laws mandating meaningful coverage for autism services, including ABA therapy. This leads to a stable and predictable revenue foundation that is attractive to buyers. For example, coverage is required up to $36,000 annually for ages 0-12 and is uncapped for ages 12-21. These factors reduce investment risk and increase the perceived value of your practice.
What key factors do buyers consider when evaluating an ABA therapy practice for sale?
Buyers look for clear profitability, operational strength, and a business that does not rely heavily on the owner. Specifically, they examine adjusted EBITDA rather than just net income, streamlined processes, effective staff utilization such as BCBA supervision ratios, low patient cancellation rates, and a strong clinical and administrative leadership team that can ensure continuity of care beyond the owner’s involvement.
How long does the sale process typically take and what are the main phases?
The sale process usually takes at least four to six months just for preparation before presenting the practice to potential buyers. After accepting an offer and signing a Letter of Intent (LOI), the buyer’s due diligence process can take an additional 90 days. This phase involves detailed reviews of financial records, contracts, compliance, and HR files. Any inconsistencies or surprises during due diligence can delay or derail the deal.
How is the value of an ABA therapy practice determined?
The industry standard for valuing an ABA therapy practice is based on a multiple of Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Adjusted EBITDA provides a clearer picture of true cash flow by adding back owner-specific and one-time expenses. For example, owner salary above a market rate and one-time legal fees are added back to net income to calculate Adjusted EBITDA, which is then multiplied by a factor based on practice size, growth, payer mix, and owner dependence.
What should sellers plan for after completing the sale of their ABA therapy practice?
Post-sale, sellers should prepare for a transition period during which they may remain involved in clinical oversight, business development, or relationship handover. This period can range from a few months to years. Sellers must also consider negotiation of terms such as non-compete clauses to protect their future work opportunities. Planning these aspects early ensures personal and financial goals are met and the practice’s legacy is preserved.
