How Long Does It Take to Sell a Home Health Agency or Hospice?

How Long Does It Take to Sell a Home Health Agency or Hospice?

Selling a Medicare-certified home health agency or hospice is one of the most personal and significant decisions an owner can make. In making that decision, one of the first questions asked is: “How long will it take to sell my home health agency or hospice?” While timelines vary significantly due to a myriad of issues, the process typically takes between 6-12 months. Below is a breakdown of the key stages and what sellers can expect when working with a skilled M&A professional.

Stage 1: Initial Consultation, Planning, and Documentation (1-2 Months)

The first step in selling a home health agency or hospice involves an initial consultation with a skilled M&A professional to outline your goals, walk through the process, and discuss your options. Valuation range and expected selling price and other deal terms are discussed. The next step includes gathering all necessary financial documents, background information, metrics, and supporting documents so that your M&A advisor can produce comprehensive marketing materials for your business.

Stage 2: Targeted Marketing and Confidentiality Agreement/NDA (1-2 Months)

Once the agency is prepared for sale, your M&A advisor will develop a strategic plan and begin targeted outreach to buyers through a network of industry contacts. Use of a blind listing will maintain confidentiality during this stage of the process. Interested buyers are required to sign a Confidentiality Agreement/Non-Disclosure Agreement (NDA) before receiving sensitive business information. This ensures that the sale process remains discreet and protects the integrity of the agency.

Stage 3: Buyer Engagement and Letters of Intent (LOI) (1-2 Months)

During this phase, serious buyers review preliminary information and begin discussions with the seller. Meetings and conference calls allow buyers to ask questions and gain deeper insights into the agency’s operations. When a buyer decides to move forward, they submit a Letter of Intent (LOI), outlining the proposed purchase terms. Negotiations on price, deal structure, and contingencies take place during this stage.

Stage 4: Due Diligence and Legal Process (3-4 Months)

After the LOI is signed, the buyer begins due diligence, which involves an in-depth review of the agency’s financials, compliance records, patient census, contracts, and operations. This is usually the most time-consuming stage, as buyers and their legal teams ensure there are no hidden liabilities. Simultaneously, legal documents, including the purchase agreement and any required transition agreements, are drafted and negotiated.

Stage 5: Regulatory Approvals and Closing (1-2 Months)

Once due diligence is completed and all legal agreements are finalized, the transaction moves to the closing phase. Regulatory approvals, such as change of ownership (CHOW) filings with Medicare and state agencies, must be processed. The closing date is scheduled once all regulatory and closing conditions are met. The final step includes transferring ownership, settling financial obligations, and ensuring a smooth transition for staff and patients.

How to Speed Up the Sale Process

If you’re looking to minimize delays and give yourself the best odds at a smooth sales process, consider the following tips:

• Prepare Early: Organizing financials, compliance records, and operational documentation in advance can streamline due diligence.
• Work with an M&A Advisor: An experienced broker can connect you with qualified buyers and facilitate a smooth transaction.
• Address Compliance Issues: Resolving licensing or regulatory concerns before listing your agency can prevent delays.

Final Thoughts

Selling a home health agency or hospice requires careful planning and execution. While the process typically takes 6-12 months, sellers who proactively prepare their agency for sale and work with experienced professionals can minimize delays and maximize value. If you’re considering selling your home health agency or hospice, consulting with an M&A specialist can help you navigate the process efficiently and achieve the best possible outcome.

An M&A Guide You Can Trust

Stoneridge Partners is a national healthcare mergers and acquisitions advisory and strategic consulting firm that manages complex transactions for home care, home health, hospice, and behavioral health companies.

We’ve been in business for over 24 years and have assisted owners just like you sell their healthcare-related businesses. We have accumulated a deep network of motivated buyers during our 20+ years, and we have years of experience as operators, attorneys, and development professionals. We’ve been in your shoes, and we know the daily challenges you face.

If the thought of a potential sale is of interest to you, let us help you optimize your prospects for a successful transaction and the highest valuation.

So how do you start? Please visit our website at www.stoneridgepartners.com or contact us at 800-218-3944 for a confidential conversation.