Selling your practice is one of the most significant decisions you will ever make. In Colorado, the market for hospice and geriatric care is driven by powerful demographic tailwinds. With the state’s senior population set to double by 2050, demand for quality care is high. This guide provides a direct look at the current market, what buyers are looking for, and how you can prepare for a successful transition that honors your legacy and hard work.
Curious about what your practice might be worth in today’s market?
Favorable Market Conditions for Colorado Sellers
The decision to sell your practice involves more than market dynamics. It is a personal one. However, understanding the current environment is a critical first step. For owners of hospice and geriatric practices in Colorado, the conditions are strong. The combination of an aging population and growing acceptance of in-home and end-of-life care creates a robust and expanding market.
The data paints a clear picture of opportunity:
1. A Growing Demographic: Colorado’s population of adults over 65 is projected to reach 1.7 million by 2050, doubling from today’s numbers. This ensures a long-term, growing patient base.
2. Increased Acceptance: Nationally, hospice utilization reached 51.7% among Medicare decedents in 2023. This shows that your services are more understood and sought after than ever.
3. Strong Market Growth: The U.S. hospice market is expected to grow from nearly $30 billion in 2024 to over $39 billion by 2030. This financial momentum attracts sophisticated buyers.
Key Considerations Beyond the Balance Sheet
When a buyer evaluates your practice, they look at more than just revenue. In hospice and geriatric care, your practice’s reputation and operational integrity are major assets. Buyers are looking for a business that is not only profitable but also stable and compliant.
A potential buyer will scrutinize your adherence to state and federal regulations. This includes everything from Colorado Department of Public Health and Environment (CDPHE) rules to your Medicare certification and quality reporting scores. They will also look closely at the pillars of your practice: your experienced staff and your referral network. A committed team and strong relationships with local physicians are signs of a healthy, sustainable business. Preparing documentation that showcases these strengths is not just paperwork; it is a core part of building your case for a premium valuation.
The Market is Active With Buyers
Its one thing to know the market has potential; its another to see that deals are actively being done. The home health and hospice sector is a focus for acquirers, from other strategic practices to private equity firms. These groups are looking to invest in well-run practices in growth markets like Colorado. This high level of interest creates a competitive environment, which can be a significant advantage for a prepared seller. A formal sale process helps ensure you are not just taking the first offer, but the best one.
| Market Activity Snapshot | Key Statistic | Why It Matters for You |
|---|---|---|
| Transaction Volume | 95 deals in 2023 | Shows a liquid and active M&A market. |
| Private Equity Interest | PE-backed acquisitions grew 4x in 8 years | Sophisticated buyers are paying premium values. |
| Profitability | 19% Medicare profit margins | Demonstrates the financial health of the industry. |
The Journey of a Practice Sale
Many owners think about selling for years. We find the most successful transitions begin 2-3 years before a sale. Selling a practice is not an event, it is a process. It starts with getting your financial and operational house in order long before you speak to a single buyer. The goal is to present a practice that is not just successful today but is positioned for future growth.
The process generally moves from preparation and valuation to confidentially marketing your practice to a curated list of qualified buyers. This leads to negotiating offers, navigating the detailed due diligence phase where buyers verify every aspect of your business, and finally, closing the transaction. Each step has potential pitfalls, especially during due diligence. Surprises at this stage can derail a deal or lower the price. Proper preparation is your best tool to ensure a smooth journey from start to finish.
What Is Your Practice Really Worth?
Valuation is often the first question an owner asks. While rules of thumb exist, like valuing based on a dollar amount per patient, a true valuation goes much deeper. It is equal parts math, market knowledge, and storytelling. Sophisticated buyers start with a key metric to understand your practice’s true cash flow.
What Buyers Look At
Most buyers focus on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure starts with your net income and adds back taxes, interest, depreciation, and any owner-related expenses that won’t continue under new ownership, like an above-market salary or personal vehicle lease. Our work with other owners has shown that most practices are undervalued until their EBITDA is properly normalized.
Beyond the Numbers
Once your baseline profitability is established, a valuation multiple is applied. This is where the story of your practice becomes important. A practice with multiple providers, a strong reputation, and a diverse referral base will command a higher multiple than a practice entirely dependent on its owner. We see valuations from 5x EBITDA or higher for well-positioned practices. An expert valuation provides you with a defensible price grounded in both your numbers and your unique market position.
Life After the Sale: Protecting Your Legacy
The moment your sale closes is not the end of the story. For many owners, what happens next is just as important as the sale price. Your legacy, the future of your trusted staff, and the continuity of care for your patients are critical considerations. These are not just afterthoughts; they should be key negotiating points when structuring a deal. The right buyer will share your vision for patient care and be committed to retaining your team.
You can also structure the deal to align with your personal goals. For example, an equity rollover, where you retain a minority stake in the new, larger entity, allows you to benefit from the future growth you helped create. This can lead to a “second bite at the apple” when the larger group sells again. Planning for these post-sale elements during negotiations is the only way to ensure your financial and personal goals are met.
The right exit approach depends on your personal and financial objectives.
Frequently Asked Questions
What factors make Colorado a favorable market for selling a hospice or geriatric practice?
Colorado’s senior population is expected to double by 2050, creating a long-term growing patient base. Additionally, there is increasing acceptance of in-home and end-of-life care, and strong market growth in the U.S. hospice sector, which is projected to grow from $30 billion in 2024 to over $39 billion by 2030. These factors lead to a robust and expanding market for hospice and geriatric care practices.
What do buyers typically look for when evaluating a hospice or geriatric practice in Colorado?
Buyers consider more than just financials; they evaluate operational integrity, compliance with state and federal regulations including CDPHE and Medicare certification, quality reporting scores, the experience of the staff, and the strength of the referral network. A stable, profitable, and compliant practice with dedicated staff and good physician relationships is highly valued.
How active is the market for hospice and geriatric practice sales in Colorado?
The market is very active, with 95 deals executed in 2023 alone. Private equity-backed acquisitions have grown fourfold in eight years, indicating strong interest from sophisticated buyers. The sector’s profitability, marked by 19% Medicare profit margins, also drives high activity and competitive buyer interest.
What are the key steps in preparing to sell a hospice or geriatric practice?
Selling a practice is a process usually starting 2-3 years before the actual sale. Preparation includes organizing financial and operational information, obtaining an expert valuation based on Adjusted EBITDA, marketing the practice confidentially to qualified buyers, negotiating offers, completing due diligence, and closing the transaction. Proper preparation helps avoid pitfalls and ensures a premium sale price.
How can I protect my legacy and personal goals after selling my practice?
Post-sale considerations should be negotiated upfront to ensure the buyer shares your vision for patient care and staff retention. You can also structure deals to meet personal goals, like an equity rollover to retain a minority stake and benefit from future growth. Protecting your legacy involves planning for the continuity of care, supporting your staff, and aligning the sale structure with your financial and personal objectives.