If you are a Hospice & Geriatric practice owner in South Carolina, you are likely wondering about the right time and way to plan your exit. The market is currently strong, but navigating the sale of a practice is a complex journey. This guide provides a clear overview of the market, key buyer considerations, and the steps involved in a successful transition, giving you the insights needed to make an informed decision about your future.
A Look at the Current Market
The national market for hospice care is robust and expanding. Projections show the industry growing from around $30 billion in 2024 to nearly $40 billion by 2030. This growth is fueled by increasing hospice utilization among Medicare beneficiaries, which hit 51.7% in 2023. This trend shows a clear and sustained demand for high-quality hospice and geriatric services.
The For-Profit Shift
In South Carolina, as across the nation, we are seeing a significant shift in ownership. What was once a field dominated by non-profits now sees over two-thirds of hospices operating as for-profit entities. This change is largely driven by private equity and other strategic buyers who are actively seeking well-run practices. For a seller, this means a larger pool of potential, well-capitalized buyers who are ready to move on attractive opportunities.
What Buyers Look for in a Practice
When a potential buyer evaluates your Hospice & Geriatric practice, they look beyond the surface. They are buying a sustainable business, and their due diligence will be thorough. Preparing in advance for their questions is one of the most effective ways to increase your practice’s value. Here is what they will focus on:
- Clean Financials. Buyers need to see clear, understandable financial records. They will analyze your revenue, profitability, and payer mix (Medicare, Medicaid, private insurance) to understand the health of your business.
- Stable Patient Census and Referrals. A consistent and growing number of patients is a primary value driver. Be ready to demonstrate the strength of your referral network from hospitals, physicians, and other facilities.
- A Proven Team. Your clinical and administrative staff are a huge asset. Low turnover and an experienced team signal a stable operation that can continue to provide excellent care after a transition.
- Regulatory Compliance. In South Carolina, adherence to state and federal regulations is non-negotiable. Buyers will verify that all licenses are current and that your practice has a strong history of compliance and quality care.
Current Market Activity in South Carolina
The market for hospice practices is not just growing. It is also very active. Understanding the types of transactions happening can help you position your practice effectively.
The Influence of Private Equity
Private equity firms have become major buyers in the hospice space. They are attracted by the stable demand and growth potential. A key example in our state is the acquisition of Agape9 Hospice by Hospice Care of South Carolina, which is backed by a private equity group. These buyers are sophisticated and move quickly when they find a practice that fits their strategy. They also have the capital to pay premium valuations for well-prepared practices.
Ongoing Strategic M&A
Beyond private equity, other healthcare organizations and larger hospice providers are also looking to expand their footprint in South Carolina through mergers and acquisitions (M&A). This creates a competitive environment for sellers. Running a structured sale process ensures you can generate interest from multiple buyer types, which often leads to better terms and a higher valuation. It is not about just finding a buyer. It is about finding the right buyer for your goals.
Understanding the Sale Process
Selling your practice follows a structured path. While every sale is unique, most successful transitions involve a few key stages. Knowing these steps helps you prepare for what is ahead and avoid common pitfalls.
- Preparation and Valuation. This is the foundation. It involves gathering your financial and operational documents and getting a comprehensive, market-based valuation. Many owners find their practice is worth more than they thought once their financials are properly adjusted.
- Confidential Marketing. Your advisor will create a compelling narrative about your practice and confidentially present the opportunity to a curated list of vetted, qualified buyers. Your identity and the sale remain private.
- Negotiating Offers. With multiple interested parties, your advisor can create a competitive dynamic to secure the best possible offers. They will help you evaluate not just the price, but also the terms and structure of the deal.
- Due Diligence and Closing. This is where the buyer verifies all the information about your practice. Being well-prepared here is critical for a smooth process. Once due diligence is complete, the final legal documents are signed and the transaction closes.
How Your Practice is Valued
Determining your practice’s value is more than a simple calculation. While you may hear rules of thumb like $60,000 per patient, sophisticated buyers use a more detailed method. They typically calculate an “Adjusted EBITDA” (Earnings Before Interest, Taxes, Depreciation, and Amortization) by normalizing your profits for any owner-related or one-time expenses. This number represents the true cash flow of the business.
That Adjusted EBITDA is then multiplied by a specific number, the valuation multiple, to determine the total enterprise value. This multiple is not random. It is influenced by several factors that buyers use to assess risk and future growth potential.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Referral Sources | Concentrated in 1-2 sources | Diverse and stable network |
| Staffing | High dependence on the owner | Strong clinical team; low turnover |
| Payer Mix | Heavily reliant on one payer | Balanced mix of Medicare/private |
| Geography | Limited service area | Broad coverage in key SC regions |
A professional valuation tells you what your practice is worth. It also shows you how to increase that value before a sale.
Planning for Life After the Sale
A successful transaction is not just about the final price. It is also about what comes next for you, your team, and the legacy you have built. Thinking through these post-sale elements from the beginning is a mark of a well-planned exit strategy.
- Protecting Your Legacy and Patients. The right buyer will be committed to continuing the high standard of care your patients have come to expect. We help you find partners who share your values and will honor the reputation you have worked so hard to build in your community.
- Caring for Your Staff. Your dedicated team is a core part of your practice’s success. A good transition plan includes clear communication and incentives to ensure your key employees feel secure and valued by the new ownership.
- Structuring for Your Future. How your deal is structured has major tax consequences. With proper planning, you can explore options like equity rollovers or earnouts that may provide a second financial windfall while optimizing your after-tax proceeds from the initial sale.
Frequently Asked Questions
What is the current market outlook for selling a Hospice & Geriatric practice in South Carolina?
The market for Hospice & Geriatric practices in South Carolina is strong and expanding. Industry projections estimate growth from around $30 billion in 2024 to nearly $40 billion by 2030. With increasing hospice utilization among Medicare beneficiaries, demand for quality hospice care continues to rise, making it a favorable time to sell.
Who are the typical buyers for Hospice & Geriatric practices in South Carolina?
The buyer pool includes private equity firms, larger healthcare organizations, and other hospice providers looking to expand. Over two-thirds of hospices have shifted from non-profit to for-profit ownership, attracting well-capitalized and strategic buyers who value well-run practices and can pay premium valuations.
What key factors do buyers consider when evaluating a Hospice & Geriatric practice?
Buyers focus on several critical factors including: 1) clean and transparent financial records showing revenue, profitability, and payer mix; 2) a stable patient census and strong referral network; 3) a proven and stable clinical and administrative team with low turnover; and 4) strict regulatory compliance with up-to-date licenses and a strong quality care history.
How is the value of a Hospice & Geriatric practice determined?
Practice valuation is primarily based on Adjusted EBITDA, which normalizes profits by adjusting for owner-related or one-time expenses. The EBITDA is then multiplied by a valuation multiple that depends on factors like referral source diversity, staffing stability, payer mix balance, and geographic coverage. A professional valuation helps establish what the practice is worth and identifies ways to increase its value before sale.
What should practice owners plan for after selling their Hospice & Geriatric practice?
Post-sale planning includes protecting the practice’s legacy and patient care quality by choosing a buyer aligned with your values, caring for your staff with clear communication and secure incentives, and structuring the deal to optimize future financial benefits and tax consequences, potentially through equity rollovers or earnouts.
