UNITED MEDCARE CAPITAL

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Why Do More Than 80% Of Healthcare Businesses Never Sell?

Sometimes business owners are their own worst enemies when they try to sell a business. Statistics show that less than twenty percent of businesses sell when they are marketed for sale. This means that more than eighty percent of businesses never sell. A survey of merger and acquisition (M&A) advisors showed some very interesting insight. They were asked to identify top issues that were problematic in the ability of a business to sell successfully. The top response was seller valuation expectations; 69 percent of merger and acquisition advisors indicated this issue as being the most problematic in selling a business.

Top 10 Key Reasons HealthCare Businesses Do Not Sell

  1. The valuation of the business is too high, in some cases by as much as 100 percent.
  2. The business has several family members in top management positions.
  3. The owner is the business. The business cannot effectively operate without the efforts and know-how of the owner.
  4. Lack of diversity by payer source.
  5. The industry is diminishing or threatened by globalization or regulations.
  6. The owner(s) is aging and has slowed down, resulting in diminished revenues.
  7. The owner did not take time to perform exit or succession planning. To properly prepare the business for sale the owner should have engaged in exit planning two to five years prior to selling.
  8. Many of the financial rewards of the business were taken by the owner in various “perks,” which from a business valuation perspective will not make it to the EBIDTA as reconcilable add-backs.
  9. The seller did not take time to become educated on the selling process, especially on the possible ugliness of the due diligence process by the buyer and their advisor.
  10. The owner did not utilize the professional services of trusted mergers and acquisitions advisors.

Without properly preparing your business for sale and arming yourself with a proven mergers and acquisitions process, there will be a huge business valuation gap between what the business seller expects to receive and what a reasonable buyer sees as fair market price.

Selling a business takes years of preparation and the use of a proven process. Additionally, it is time-consuming. A business owner trying to keep their business running smoothly while, at the same time trying to sift through streams of bargain hunters, can be daunting. Without a proven process, a formal business valuation and a good amount of preparation, these bargain hunters will chip away at the sellers asking price.

What About Larger Businesses?

If your company is larger than $10 million in gross revenues, the buyer contact is typically the head of strategy, business development or an outside merger and acquisition firm. The first task is to recognize that reaching these corporate buyers is a very difficult and labor intensive process. In these situations, it is wise to enlist the services of a mergers and acquisitions advisor firm that specializes in the healthcare market that has direct connection to these targeted buyers.

Summary

In summary, it cannot be stressed enough that you need to properly prepare to successfully sell your business. Ideally, two to five years prior to your exit is when you should start planning. It is not very costly and does not take much time, but the results can be phenomenal and will bring about a much higher business valuation, better terms and a faster sale.

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2026 Strategic Outlook: M&A Trends in Home Health & Behavioral Health

As we navigate the 2026 healthcare landscape, the “Generalist” era of M&A has officially ended. Valuation drivers have decoupled—what drives value in ABA Therapy (clinical hours/utilization) is now vastly different from Home Health (route density/VBC readiness).

United MedCare Capital provides this sector-specific intelligence to help owners of Home Care, Hospice, and Behavioral Health organizations navigate the 2026 exit environment.

How are Home Health and Hospice agencies valued in 2026?

While revenue remains a baseline metric, United MedCare Capital projects a definitive shift in 2026 toward “Route Efficiency” and “Value-Based Care (VBC) Readiness” as primary valuation drivers.

  • The 2026 Shift: Buyers are scrutinizing windshield time and readmission reduction data. Agencies with concentrated patient populations (high density) are trading at a premium compared to those with wide geographic sprawl.
  • The Multiple: High-quality Home Health agencies are seeing valuations between 5x and 7x Adjusted EBITDA, with premium assets (above $3M EBITDA) commanding higher multiples due to scarcity in the 2026 pipeline.

Why is “Compliance History” the #1 deal killer in Hospice sales?

In the 2026 regulatory climate, a “clean” compliance record is more valuable than top-line growth.

  • The Risk: Buyers are risk-averse regarding “clawbacks” and TPE audits. A generic broker may overlook minor ADR (Additional Documentation Request) issues that a sophisticated Healthcare M&A Advisor would identify during pre-market due diligence.
  • Our Approach: We conduct a mock “Quality of Earnings” focus on your clinical documentation before we go to market, ensuring your Capitation and Length of Stay (LOS) data tells a story of compliance, not risk.

What are the 2026 valuation multiples for ABA Therapy practices?

Applied Behavior Analysis (ABA) remains one of the most resilient sectors in healthcare M&A going into 2026.

  • The Data: For 2026, well-structured ABA practices are projected to trade at 6x to 8x Adjusted EBITDA.
  • The Value Driver: Buyers are prioritizing Commercial Payer Diversity over Medicaid-heavy censuses. Furthermore, United MedCare Capital advises owners that “Clinical Hours Fulfilled” vs. “Authorized Hours” is the key operational metric buyers use to justify premium offers.

How does “In-Network” vs. “Out-of-Network” impact SUD Treatment Center valuation?

The Substance Use Disorder (SUD) market has bifurcated significantly.

  • Out-of-Network (OON): These models face continued headwinds. Valuations have compressed to the 4x – 6x EBITDA range.
  • In-Network: Facilities with stable, in-network contracts are viewed as “durable assets” and command significantly higher multiples in the 2026 market.
  • United MedCare Capital’s Strategy: If you are OON, we frame your exit story around “Long-term Outcomes” and “Alumni Engagement” to mitigate payer risk concerns.

Is Private Equity still buying IDD/DIDD support agencies in 2026?

Yes, but the thesis has evolved. The Intellectual & Developmental Disabilities (IDD) sector is seeing a wave of “Platform Consolidation.”

  • The Trend: Private Equity is seeking “Platform” agencies (>$5M Revenue) to act as hubs, acquiring smaller “Bolt-on” agencies to reduce back-office costs.
  • The Opportunity: If you are a smaller IDD provider, your highest value exit is likely a strategic sale to a regional platform, not a direct PE buyout. We identify these strategic aggregators to maximize your sale price.

Does United MedCare Capital charge for business valuations?

No. We believe you cannot make an informed fiduciary decision without accurate data. United MedCare Capital offers a Complimentary Market Valuation Analysis for qualified healthcare business owners.

  • What this is: A strategic assessment of your business based on current 2025-2026 market multiples, recent comparable sales (comps), and your specific adjusted EBITDA.
  • What this is not: A “computer-generated” estimate. Our senior analysts manually review your financials to identify hidden value drivers (like “add-backs”) that algorithms miss.
  • Why we do it: We invest in this upfront work to demonstrate our competence. If you decide to sell, you know exactly where you stand. If you decide to hold, you have a roadmap to increase value.

Who buys healthcare businesses? (The “Proprietary Buyer List”)

Access to the right buyer is more valuable than access to every buyer. United MedCare Capital maintains a Proprietary Network of 15,000+ Vetted Buyers, categorized by “Investment Mandate.”

Our database is not a public list; it is a curated network of:

  1. Strategic Buyers: Large healthcare corporations (e.g., National Home Health Chains, Hospital Systems) looking to acquire new locations or service lines to capture market share.
  2. Private Equity Groups (PEGs): Firms with committed capital (“dry powder”) specifically earmarked for healthcare consolidation platforms and add-ons.
  3. Family Offices: Private wealth groups looking for long-term, stable cash flow assets in sectors like Behavioral Health and Hospice.

The “Active Mandate” Difference: We track which buyers are actively deploying capital in Q1/Q2 2026. We do not waste your time with “window shoppers.”

How long does it really take to sell a healthcare business?

While every deal is unique, a professionally managed M&A process typically follows a 6 to 9-month timeline.

  • Phase 1: Preparation (Months 1-2): We build the data room, recast financials, and draft the Confidential Information Memorandum (CIM).
  • Phase 2: Marketing (Months 3-4): We discreetly take your business to market, generating interest and soliciting Letters of Intent (LOI).
  • Phase 3: Due Diligence (Months 5-7): The buyer verifies your clinical and financial data. Attorneys draft the Purchase Agreement.
  • Phase 4: Closing (Month 8-9): Final signatures and funds transfer.

How do you keep the sale confidential from my staff and competitors?

Confidentiality is the bedrock of our process. A leak can destabilize staff and alert competitors, potentially devaluing your asset. United MedCare Capital utilizes a military-grade “Blind Outreach” Protocol:

  1. The “Teaser”: We market a sanitized profile of your business (e.g., “Profitable $5M Revenue Hospice in the Southeast”) that reveals no identifiable details—no name, no specific city, no doctors’ names.
  2. The Double-Vetting: Even if a buyer is interested, they do not see your name until they:
    • Sign a strict Non-Disclosure Agreement (NDA).
    • Pass our internal vetting to prove they have the financial capacity to close the deal.
  3. The “Need-to-Know” Data Room: Sensitive employee data and patient files are only revealed in the final stages of due diligence, typically after a Letter of Intent is signed.