The market for selling a Hospice Care practice is experiencing significant momentum. For practice owners in Oklahoma City, this presents a unique window of opportunity. This guide provides a straightforward look at the current market, valuation principles, and key steps for navigating a successful sale. We will cover the specific factors that make the Oklahoma City hospice market attractive and explain how to prepare your practice for the best possible outcome.
Curious about what your practice might be worth in today’s market?
A Market Poised for Growth
Understanding the environment you are selling in is the first step. The good news is that the hospice sector is strong, both nationally and locally. Buyers are actively looking for well-run practices, and Oklahoma City is on their radar.
National Momentum
The U.S. hospice market is valued at over $29 billion and is projected to grow substantially, with some estimates reaching over $60 billion by the early 2030s. This growth attracts sophisticated buyers, including private equity firms and large healthcare systems, who are looking to enter or expand in stable, high-demand sectors. This national interest creates a favorable environment for sellers across the country.
The Oklahoma City Landscape
This national trend is reflected locally. The 2021 acquisition of Alpha Home Health and Hospice by a major provider shows that strategic buyers see value in the Oklahoma market. For a practice owner in Oklahoma City, this means you are not operating in a vacuum. You are part of a desirable and growing healthcare vertical, which can lead to more buyer interest and competitive offers when you decide to sell.
Key Considerations for Hospice Owners
Beyond market trends, buyers are looking at the specific health of your practice. In the hospice field, they focus on a few key areas. Your regulatory compliance must be flawless. Buyers will conduct deep diligence on your adherence to state and federal laws, including physician certifications, billing practices, and patient privacy protocols. A clean compliance record is not a bonus. It’s a requirement.
Equally important is your operational strength. Buyers want to see documented quality assessment programs, consistent staff training, and stable patient census numbers. They are not just buying your past performance; they are buying the systems that produce it. A strong, stable referral network is another critical asset that demonstrates the sustainability of your practice and significantly increases its attractiveness to potential acquirers. Preparing these areas for scrutiny is a foundational step in the sales process.
Reading the M&A Market Signals
The last few years have reshaped the hospice M&A landscape, creating a seller’s market for well-prepared practices. Here is what we are seeing:
- Heightened Transaction Volume. After a brief pause in 2020, transaction activity surged. This high demand means more buyers are competing for a limited number of quality practices, which puts sellers in a stronger negotiating position.
- Strong Valuation Multiples. This competition has driven up valuations. While outlier deals have reached incredible heights, even smaller hospice transactions have seen healthy median multiples around 4.7x EBITDA. The exact multiple depends on many factors, but the trend is positive for sellers.
- Strategic Buyer Interest. The buyers are not just local competitors. They are sophisticated regional and national players looking for a foothold in markets like Oklahoma City. This broadens the pool of potential partners and increases the likelihood of finding a buyer who aligns with your goals.
Timing your practice sale correctly can be the difference between average and premium valuations.
Understanding the Sale Process
Many owners think the selling process starts when they are ready to exit. The reality is that the most successful sales begin years in advance. Buyers pay for proven performance, not potential. Starting a 2-3 year preparation timeline allows you to professionalize financials, streamline operations, and build a track record that maximizes value. The process generally moves from financial preparation and valuation to confidentially marketing your practice to a curated list of qualified buyers. This is followed by a rigorous due diligence phase where the buyer verifies every aspect of your business. Finally, you move to legal documentation and closing. Each step has potential pitfalls, making a structured, professionally guided approach critical to avoiding deal fatigue or value erosion.
Preparing properly for buyer due diligence can prevent unexpected issues.
How Your Hospice Practice is Valued
Your practice is likely worth more than you think. Many owners look at their net income and feel its not enough to attract serious buyers. But sophisticated buyers look deeper, at a figure called Adjusted EBITDA. This calculation starts with your earnings but adds back owner-specific expenses like an above-market salary, personal vehicle leases, or other non-operational costs. This reveals the true cash flow of the business. That Adjusted EBITDA figure is then multiplied by a number (the “multiple”) that reflects your practice’s strengths.
This is where your preparation pays off. A practice with strong systems and clear growth potential will command a higher multiple.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Size | Smaller patient census | Larger, scalable operations |
| Referrals | Dependent on 1-2 sources | Diverse, stable referral network |
| Operations | Owner-dependent | Strong management team in place |
| Compliance | Minor historical issues | Clean, well-documented record |
Most practices are undervalued until their financials are properly normalized and their story is told correctly.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
Selling your practice is more than a financial transaction. Its about your legacy, your staff, and your future. Many owners fear losing control, but a sale does not have to mean a complete exit. Modern deal structures are flexible. You can negotiate for Strategic Partnerships that keep you involved in a clinical or leadership capacity. You can also structure the deal to include Equity Rollover, where you retain a minority stake in the new, larger entity. This gives you a “second bite at the apple” if the company is sold again in the future. Planning for these outcomes during negotiations is key to designing an exit that aligns with your personal and professional goals, ensuring your team is cared for and your legacy is protected.
Your legacy and staff deserve protection during the transition to new ownership.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What is the current market outlook for selling a Hospice Care practice in Oklahoma City?
The hospice care market is strong nationally and locally with significant growth momentum. Oklahoma City is seen as an attractive location by buyers including private equity firms and healthcare systems. There is high buyer interest and competitive offers due to the growing demand and strategic acquisitions in the area.
What factors do buyers consider most important when purchasing a hospice care practice in Oklahoma City?
Buyers prioritize regulatory compliance, flawless adherence to state and federal laws, operational strength including quality programs, staff training, stable patient census, and a strong referral network. These factors demonstrate a sustainable and well-run practice, which is critical for attracting competitive offers.
How is the value of a hospice care practice determined?
Valuation is based on Adjusted EBITDA which reflects the true cash flow after removing owner-specific expenses. This figure is multiplied by a multiple that depends on practice size, referral diversity, operational independence, and compliance record. Practices with strong systems, growth potential, and clean compliance records command higher multiples, often around 4.7x EBITDA or more.
What steps should an owner take to prepare their hospice practice for sale?
Owners should start preparing 2-3 years in advance by professionalizing financials, streamlining operations, building a track record of performance, and preparing for buyer due diligence. This preparation helps maximize value and smooth the sale process, avoiding pitfalls like deal fatigue or value erosion.
Can owners remain involved in their practice after selling it?
Yes, owners can negotiate deal structures such as Strategic Partnerships to stay involved in leadership or clinical roles, or Equity Rollover arrangements to retain minority stakes. These options allow owners to protect their legacy, support their staff, and participate in future growth or sales.