Selling your Skilled Nursing Facility (SNF) in Nebraska presents a unique opportunity. The market is projected to grow, yet owners like you face significant regulatory headwinds and operational pressures. This guide provides a clear overview of the current landscape, from market trends to the valuation process. Understanding these factors is the first step toward a successful and profitable transition, ensuring you capitalize on your years of hard work.
Curious about what your practice might be worth in today’s market?
Market Overview
The market for Skilled Nursing Facilities in Nebraska is defined by strong demand. With over 14,500 certified beds generating more than $1.35 billion in gross patient revenue annually, the need for quality care is clear. This demand is set to continue as the industry is projected to grow and long-term care costs rise. However, this opportunity is paired with significant challenges. Nebraska faces a projected shortage of over 5,400 nurses by 2025. This workforce pressure directly impacts operations and profitability, making it a critical factor for any potential buyer assessing your facility. A successful sale depends on navigating this dual reality of high demand and operational strain.
Key Considerations
When preparing to sell your Nebraska SNF, you must look beyond the daily operations. Several state-specific factors can dramatically influence your sale process and final valuation.
Navigating New Regulations
New federal minimum staffing requirements are a top concern for Nebraska owners. These mandates, especially the 24/7 registered nurse rule, can strain already thin resources and even risk facility closures. Buyers will heavily scrutinize your staffing model and your plan for compliance. Proactively addressing this shows foresight and can protect your valuation.
Understanding Certificate of Need (CON) Laws
Nebraskas Certificate of Need laws add a layer of complexity to any transaction. The process for transferring ownership or changing bed capacity is highly regulated. A mistake in the notification or application process with the Department of Health and Human Services (DHHS) can delay or even derail a sale. You need a team that understands how to manage these requirements seamlessly.
Addressing Profit Margins
The average net profit margin for a nursing home can be as low as 0.58%. While this can be improved by normalizing expenses, buyers will look closely at your financial performance. You must be prepared to present a clear financial story that demonstrates the true earning potential of your facility.
The structure of your practice sale has major implications for your after-tax proceeds.
Market Activity
The Nebraska SNF market is attracting sophisticated buyers. We are seeing a clear trend of increased investment from private equity firms and experienced regional owner-operators. These groups are actively seeking opportunities and are not deterred by facilities facing challenges. For example, the Holmes Lake Rehabilitation and Care Center in Lincoln, a 97-bed facility with a 1-star rating and low occupancy, was recently sold. The buyer was a regional operator who saw the underlying potential and had the expertise to execute a turnaround. In another recent transaction, the national Ensign Group acquired the 83-bed St. Joseph Rehabilitation and Care Center. These deals show that both distressed and stable assets are in play. The key is positioning your practice to attract the right type of buyer for your specific situation.
The Sale Process
Selling your facility is a structured process, not a single event. While a typical transaction can take 90 to 150 days from listing to closing, the most critical work happens long before your facility is ever presented to buyers. The best time to begin preparing is often two or three years before you plan to sell. Buyers pay for proven performance, not just potential.
Here are the typical stages of a professionally managed sale:
- Preparation and Planning. This is where we work with you to analyze finances, address compliance issues, and prepare all necessary documentation. Proper preparation can significantly increase your final value.
- Valuation. We conduct a comprehensive valuation to determine a strategic asking price based on your facility’s true financial performance and market conditions.
- Confidential Marketing. We create a compelling narrative around your facility and present the opportunity to a curated database of qualified buyers, all under strict confidentiality agreements.
- Negotiation and Offer Selection. We manage inquiries, facilitate site visits, and negotiate terms to secure the best possible offer from the right buyer.
- Due Diligence and Closing. This is the buyers final review of your operations, financials, and legal standing. We help you manage this intensive phase to ensure a smooth path to the closing table.
The due diligence process is where many practice sales encounter unexpected challenges.
Valuation
Determining the value of your SNF is more than an accounting exercise. Buyers don’t look at your net income. They look at your Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents the true cash flow of your business, normalized for any owner-specific or one-time expenses. We find the real number by adding back things like an above-market owner salary or non-recurring legal fees. This adjusted profit is then multiplied by a figure called a “multiple.” That multiple isn’t random. It is influenced by factors like your facilitys size, payer mix, staff stability, and recent performance trends. A small, single-owner facility might receive a 3x-5x multiple, while a larger, well-run facility with a strong growth story could command a multiple of 7x or more. A comprehensive valuation tells the story behind the numbers to achieve the highest multiple.
Post-Sale Considerations
The day you close the sale is a beginning, not an end. A successful transition is defined by what happens next. Planning for the post-sale period is a critical part of the overall strategy and should be structured into the deal from the start. Key areas require your attention to protect your financial future and your legacy.
| Consideration Area | Why It Matters |
|---|---|
| Tax Strategy | The structure of your sale has massive implications for your after-tax proceeds. Proper planning can save you a significant amount of money. |
| Staff & Legacy | How will your dedicated staff be treated? The right buyer will value your team and continue your legacy of care, which we can negotiate into the deal. |
| Earnouts | A portion of your payment may be tied to the facility’s future performance. You need to understand the targets and the likelihood of achieving them. |
| Equity Rollover | You may be asked to “roll over” a piece of your equity into the new company. This offers potential upside but also carries risk that needs to be evaluated. |
Thinking through these elements ensures that the sale meets not just your financial goals, but your personal ones as well.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What are the key market trends affecting Skilled Nursing Facilities (SNFs) sales in Nebraska?
The Nebraska SNF market shows strong demand with over 14,500 certified beds and annual gross patient revenue exceeding $1.35 billion. The industry is projected to grow despite challenges like a projected shortage of over 5,400 nurses by 2025. Buyers are interested in both stable facilities and those facing operational challenges, reflecting active investment from private equity and regional operators.
How do new federal staffing regulations impact the sale of an SNF in Nebraska?
New federal minimum staffing requirements, including the 24/7 registered nurse rule, increase operational pressures on facilities. Buyers will closely examine your staffing model and compliance plans, making proactive compliance a key factor in protecting or enhancing your facility’s valuation.
What role do Nebraska’s Certificate of Need (CON) laws play in selling an SNF?
Nebraska’s CON laws regulate ownership transfers and changes in bed capacity, adding complexity to SNF sales. Mistakes in the notification or application process with the Department of Health and Human Services (DHHS) can delay or derail the sale. Experienced guidance is essential to navigate these legal requirements smoothly.
How is the value of an SNF determined when selling in Nebraska?
Value is based on Adjusted EBITDA, reflecting the true cash flow normalized for owner-specific or one-time expenses. The adjusted profit is multiplied by a market-informed multiple influenced by factors like facility size, payer mix, staffing stability, and performance trends. Multiples range typically from 3x-5x for smaller facilities to 7x or more for larger, well-run operations.
What are important post-sale considerations for SNF owners in Nebraska?
Post-sale planning affects your financial future and legacy. Important areas include tax strategy to maximize after-tax proceeds, staff treatment to protect your legacy of care, earnouts tied to the facility’s future performance with clear targets, and equity rollover opportunities that can provide upside but with associated risks.