The decision to sell your Hospice and Geriatric practice in Sacramento is a significant one. With the region’s 65+ population growing at its fastest rate in 130 years, the demand for quality end-of-life and geriatric care has never been higher. This guide provides a clear overview of the market, valuation, and sale process. Understanding these dynamics is the first step toward a successful and rewarding transition for you and your legacy.
Market Overview
The Sacramento market for hospice and geriatric care is defined by powerful demographic and economic trends. Owners considering a sale should be aware of these dynamics.
A Growing Demand
Sacramento County’s senior population is expanding at a historic pace. This demographic shift is the primary driver of demand, creating a strong, “recession-proof” need for the services you provide. Buyers see this local trend as a clear indicator of sustained future revenue and are actively seeking quality practices to acquire in the region.
A Robust State Market
At the state level, the hospice industry is incredibly active. California’s hospices surpassed $5 billion in gross revenue in 2023. This high level of economic activity attracts a wide range of buyers, from local health systems like Dignity Health to national private equity groups, making it a competitive landscape for sellers.
Key Considerations
Selling is more than a transaction. It’s a process that requires careful thought about your practice and your future. Here are three things we advise owners in Sacramento to focus on.
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Navigating Regulatory Scrutiny. California’s hospice sector is under a microscope. Buyers perform deep diligence on compliance history, complaint investigations, and quality of care metrics. Having immaculate records and a proven history of compliance is not just a bonus. It is a requirement for a smooth sale at a premium valuation. Any unresolved issues can become major obstacles during negotiations.
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Highlighting a Modern Care Model. Buyers are looking for practices that align with the future of elder care. As UC Davis Health points out, integrating geriatrics, palliative care, and hospice is a critical differentiator. If your practice demonstrates this kind of patient-centric, coordinated care, it becomes a much more attractive acquisition target.
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Aligning Your Personal and Financial Goals. The best time to sell is when it aligns with your personal timeline and financial needs. This process should start years before you plan to exit. That way, you have time to prepare the practice and position yourself to sell on your terms, not out of necessity.
Market Activity
The M&A landscape for hospice and geriatric care is active and evolving. Knowing the key trends can help you time your exit for maximum value.
The Dominance of Private Equity
Private equity firms have become the biggest buyers in the hospice space, driving approximately three-quarters of all M&A deals. These groups are attracted to the stable demand and growth potential. For you as a seller, this means your potential buyer is likely a sophisticated financial entity looking for well-run practices with clean financials and clear growth paths. They move quickly and expect a high level of professionalism throughout the process.
A Market Poised for a Rebound
After a temporary slowdown in 2023 and early 2024 due to interest rates and inflation, the M&A market is widely expected to regain momentum heading into 2025. This creates a strategic window. Practice owners who begin preparing now will be perfectly positioned to enter a healthier, more competitive market where well-prepared businesses can attract premium offers.
The Sale Process
Understanding the path from decision to closing can make the journey feel more manageable. While every sale is unique, a well-managed process typically follows a clear structure. A professional advisor runs this process to protect your confidentiality and create a competitive environment designed to maximize your outcome.
| Phase | What It Means for You |
|---|---|
| 1. Preparation & Valuation | We work with you to analyze your financials, normalize your earnings (Adjusted EBITDA), and create a detailed valuation. This forms the foundation of the entire sale strategy. |
| 2. Confidential Marketing | A compelling, anonymous summary of your practice is shared with a vetted list of qualified buyers. Your identity remains confidential until a potential buyer is verified and signs a non-disclosure agreement. |
| 3. Receiving & Negotiating Offers | Offers are solicited and compared. We help you negotiate not just the price, but also key terms related to your transition, staff, and ongoing role, if any. |
| 4. Due Diligence | The chosen buyer conducts a deep dive into your practice’s financials, operations, and compliance. This is where thorough preparation pays off, as it prevents surprises that could derail the deal. |
| 5. Closing | Final legal documents are signed, funds are transferred, and the ownership of the practice officially changes hands. |
Valuation
Determining what your practice is truly worth is the most critical step in the sale process. While online articles might mention simple rules of thumb, a professional valuation by a sophisticated buyer is much more detailed.
The Core Components of Value
For a hospice, value is often discussed in two ways. First is a metric like average value per patient, which can be around $60,000 in the current market. However, the more important method used by financial buyers is a multiple of your Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This multiple can range from 5x to over 8x depending on your practice’s size, growth, and operational maturity.
Why Adjusted EBITDA Matters
Your practice’s net income is not the number buyers use. Instead, we calculate Adjusted EBITDA by taking your profit and adding back owner-specific expenses like excess salary, personal vehicle leases, or other non-operational costs. This reveals the true cash flow of the business. Properly calculating this figure is the single most effective way to increase your practice’s on-paper valuation before you even go to market. Many owners are surprised to learn their practice is worth significantly more than they thought.
Post-Sale Considerations
The work isn’t over once the deal closes. A successful transition plan ensures your legacy, your staff, and your personal finances are secure long after the sale. Planning for these elements during negotiations is critical.
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Defining Your Future Role. Do you want to continue working clinically for a couple of years, or are you ready to walk away on day one? The structure of your exit is negotiable. We help owners define a transition plan that matches their desired level of involvement, whether it’s a full-time clinical role, a part-time advisory position, or a clean break.
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Protecting Your Team and Legacy. Your staff and the culture you built are a huge part of the practice’s value. It is important to find a buyer who recognizes this. Sale agreements can include provisions for retaining key staff and protecting the patient-care philosophy you worked so hard to establish. This ensures your legacy continues.
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Structuring Your Proceeds. The structure of your sale has major implications for your after-tax returns. A skilled advisor works with your legal and tax team to structure the deal in the most tax-efficient way possible, helping you keep more of your hard-earned proceeds.
Frequently Asked Questions
What are the key market trends affecting the sale of Hospice & Geriatric practices in Sacramento, CA?
The Sacramento market is characterized by a rapidly growing senior population (65+ demographic growing at its fastest rate in 130 years), driving strong demand for hospice and geriatric care. Additionally, the hospice industry in California is very active and generates over $5 billion in revenue, attracting a competitive buyer pool including local health systems and private equity firms.
How is the valuation of a Hospice & Geriatric practice in Sacramento determined?
Valuation primarily relies on a multiple of Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which can range from 5x to over 8x depending on the practice’s size, growth, and operational maturity. Another common metric is average value per patient, around $60,000 in the current market. Adjusted EBITDA excludes owner-specific expenses to reveal true cash flow and significantly impacts the offering price.
What are important considerations when preparing to sell my Hospice & Geriatric practice?
Key considerations include maintaining spotless regulatory compliance records since buyers scrutinize this heavily, highlighting a modern, integrated care model that combines geriatrics, palliative, and hospice care, and aligning the sale timing with your personal and financial goals. Preparation should start years before exit to position the practice well and maximize value.
What does the sale process for a Hospice & Geriatric practice in Sacramento typically involve?
The process generally follows five phases: 1) Preparation and Valuation where financials are analyzed; 2) Confidential Marketing with anonymous promotion to qualified buyers; 3) Receiving & Negotiating Offers balancing price and transition terms; 4) Due Diligence for buyer scrutiny of finances and compliance; and 5) Closing with legal completion and ownership transfer.
What happens after selling my Hospice & Geriatric practice?
Post-sale, you define your future role, whether continuing clinically, advisory, or fully stepping away. Protecting your staff and legacy is crucial, often through agreements ensuring personnel retention and care philosophy preservation. Finally, structuring the proceeds tax-efficiently with professional advice helps maximize your financial outcome post-sale.