What a buyer looks at before acquiring your home health agency
By James Richardson · Co-Founder · July 18, 2026
Buyers don't price your EBITDA. They price their confidence in your EBITDA.
Two agencies with identical financial performance can trade at meaningfully different multiples, and the difference is almost never the operation. It's whether the buyer believes the numbers without having to go find out.
Why I know this
I spent my career at PwC in turnaround and restructuring, then left to work directly with small businesses. I've owned and operated service companies. And I've spent years on the other side of this table — in the community of people who buy and sell businesses.
I've seen what gets flagged in diligence. More importantly, I've seen what makes a buyer quietly lower the number without telling you why.
What they actually look at
Revenue quality, not revenue
Concentration by payer. If one payer is most of your revenue, that isn't revenue — it's a dependency. Buyers price dependencies.
Revenue by geography and program. A buyer wants to know which parts of your business are actually working. If you can't tell them, they'll assume the worst part is bigger than it is.
Reimbursement history. Denials, appeals, recoveries. Not because denials are disqualifying — everyone has them — but because the pattern tells them whether your billing is controlled or lucky.
Documentation, because it's the risk
In home health, documentation isn't administrative. It's the asset.
A buyer is underwriting the possibility that a survey or an audit reopens two years of claims. If your documentation is thin, they aren't buying an agency — they're buying a contingent liability with an agency attached. That gets priced, and it gets priced conservatively.
Consistency over time
Three years of clean, consistent, comparable financials beats one great year, every time.
If your chart of accounts changed, if allocation methods shifted, if last year's numbers can't be compared to this year's — the buyer can't build a model. When they can't build a model, they don't walk away. They just assume the pessimistic case and price it.
Whether the business works without you
If every referral relationship, every payer negotiation, and every clinical judgment call runs through the owner, then the thing being sold walks out the door at closing.
Buyers know this. They price it as retention risk, and they structure around it with earnouts you won't like.
What kills deals
Not bad numbers. Surprises.
A problem disclosed in month one is a negotiating point. The same problem discovered in month four is a credibility event — and once a buyer thinks you didn't know your own business, everything else they've been told is suddenly worth re-checking.
The most expensive thing in diligence isn't a finding. It's a finding you should have known about.
The timing argument
The earlier you engage before a sale, the better the outcome. That isn't a sales line, it's arithmetic.
Diligence readiness built over eighteen months is a valuation. The same work compressed into six weeks is a discount — because you're now fixing things in front of a buyer who's watching you fix them, and every fix is evidence the problem was real.
If you think you might sell in three years, the work starts now. If you think you might sell in six months, the work started two years ago and you should call anyway.
The honest test
Ask yourself one question: if a buyer's analyst opened your books tomorrow with no explanation from you, what would they conclude?
If the answer requires you in the room to explain it, you're not ready. That's not a criticism. That's just the gap, and it's closeable.