Buying a Home Care Agency
Know Which Business You Are Buying
Home care spans three different businesses that get discussed as one: non-medical personal care (companionship, bathing, meals), Medicare-certified home health (skilled nursing under clinical billing rules), and hospice. Searchers overwhelmingly buy the first. It carries lighter licensure, no clinical billing complexity, and the cleanest demand story, an aging population that wants to stay home. This guide covers non-medical agencies; certified home health is a different acquisition with different diligence.
What Agencies Trade For
The publisher's sold home health care listings put half of transactions between 2.22x and 3.63x SDE across 2021 to 2025, on a 3x median, a $700,000 median sale price and revenue at 0.38x to 0.74x. Brokers quote single-market agencies around 3x to 5x EBITDA and regional operators above that, on a basis no publisher of sold data prints. Payer mix does the sorting inside the band: private-pay-heavy books with durable recurring hours price at the top, while Medicaid-heavy books trade lower because rates are set by the state and move with budgets. Ask for revenue by payer before anchoring on anything.
Caregiver Retention Is the Operating Metric
Industry caregiver turnover commonly runs 60% to 80% a year, and every departure costs recruiting, onboarding, and sometimes the client relationship itself. Coverage of the category treats turnover below 50% as evidence of real operational discipline worth a premium of a turn or more. In diligence, pull actual turnover by cohort, open-shift and missed-visit rates, recruiting pipeline and time-to-fill, and pay rates against the local market, because scheduling stability is what clients are actually buying. An agency cannot claim the companionship exemption a household can, so every aide earns minimum wage and overtime and the drive between clients counts as paid hours. A rescission of that rule is proposed and not adopted.
The Payer Mix Question
Private pay means consumer sales, weekly invoices, and rate freedom, with churn tied to client mortality and family budgets. Medicaid personal-care programs mean state-set rates, authorization paperwork, and electronic visit verification mandated under federal law, with recoupment risk when documentation gaps surface. Neither is wrong, but they are different businesses operationally, and a book split across both needs management fluent in each. Confirm every state license is current and matches the services actually delivered.
What to Verify in Diligence
Worker classification first: agencies running caregivers as 1099 contractors carry reclassification exposure that several states have pursued, and a W-2 model with clean payroll is what lenders and buyers expect. Then client concentration (a few high-hour clients can dominate revenue), referral sources and who owns those relationships, billing and visit-verification records for any Medicaid volume, complaint and incident history, and insurance coverage including non-owned auto, a commonly missed exposure when caregivers drive clients.
Financeability Notes
Non-medical agencies fit SBA 7(a) structures, with underwriting attention on payer concentration, caregiver turnover, and the transition plan for referral relationships. Medicaid-heavy books add rate-change risk that lenders price through more conservative coverage expectations. Model debt service on hours you believe survive both a rate adjustment and normal client run-off, and treat the schedule coordinator as a key employee in the retention plan.
Terms in This Industry
Authorized versus delivered hours
Hours a payer approved against hours the agency actually staffed and billed.
EVV (Electronic Visit Verification)
The Medicaid-required record of when, where and by whom a home-care visit happened.
Payer mix
The split of revenue across who pays, each source with its own rate and its own reliability.
Caregiver turnover
The rate at which caregivers leave and have to be replaced, often over half the staff a year.
Owner screening
The background check that reaches the people who own the agency, not only the aides.
Compatible case mix
How well a roster matches the caregivers, which for a delegated task is not a scheduling call.
Pre-presence training hours
California requires a home care aide to finish five hours of training before meeting any client.
Employee dishonesty bond
The bond a home care agency posts against theft by its own aides, and a condition of the license.
What the Data Says
BizBuySell's home health care benchmarks, a blend of medical and non-medical agencies, show a $700,000 median sale at a 3.0x median earnings multiple (3.01x average) and 0.52x median revenue, with 175 median days on market. The page puts half of agencies between 2.2x and 3.6x SDE, with larger, well-run ones above that range and smaller ones below it.
Source: BizBuySell, home health care valuation benchmarks (2021-2025 sold listings)
Home health care businesses sold on BizBuySell from 2021 through 2025 show a $700,000 median sale price on $1,300,000 median revenue and $263,436 median owner earnings, a 3.03x average earnings multiple. The median price is down 27% across those five years, and these are sold listings, medical and non-medical blended.
Source: BizBuySell home health care benchmarks (2021-2025 sold listings)
Section 12006(a) of the 21st Century Cures Act requires every state to run electronic visit verification for Medicaid personal care services, mandatory since January 1, 2020, and home health services since January 1, 2023. States that lag face federal match reductions. So an agency's EVV records are both a compliance artifact and the cleanest hours-level audit trail diligence will get.
Enter earnings to apply this industry's cited band.
A sanity check against asking prices, not a valuation.
Margin context, from IRS Schedule C aggregates (TY2023): home health care services ran a 12.7% net margin across all filers and 40.6% among profitable ones; a listing far above the second number is making a claim about add-backs. Both figures and their caveats are on Industry Economics.
Where they are, from Census County Business Patterns: California (5,750), Texas (4,022) and Pennsylvania (2,439) hold the most buyable ones. Each state guide ranks its own counties, which is the number that decides a search: nobody buys a state, they buy inside a drive.
This industry ranks in the Metro Target Scans for Chicago, Los Angeles. The scans rank a trade on acquisition-loan volume, loan size and moat, and on survival only where the loan file holds enough seasoned loans to publish a rate.
Lender context, from the SBA loan-level file: Live Oak Banking Company (141), CIBC Bank USA (36), Associated Bank National Association (31) wrote the most of this industry's 492 acquisition approvals. A bank that knows the trade says yes faster; the ranking for every industry is on Most Active Lenders by Industry.
Holding a live deal in this industry? Underwrite it with this industry preselected, its cited band and charge-off rate loaded.
Compare bands across industries in the cited multiple bands by industry.
Who Else Is Buying in This Industry
- Havencrest Capital Management · Dallas, Texas
Healthcare-only lower-middle-market private equity whose Avid Health at Home platform has tucked in eight personal-care and private-duty nursing agencies, across five states since 2023.
- Tech Medical Home Care Services · 2026 · A Kentucky and Ohio home care company, the platform's eighth tuck-in, announced by the sponsor in August 2026.
- 6 more confirmed on the firm's profile
- SIG Partners · Dallas, Texas · runs a searcher program
A family-owned Dallas holding company that counts thirty-eight businesses bought in five years and dates every close on its own portfolio page, buying to hold rather than to exit.
- Krista Care · 2026 · A home care company listed as closed in May 2026 on the companies page, no city printed, with no release.
- 6 more confirmed on the firm's profile
- Waud Capital Partners · Chicago, Illinois
A healthcare and software investor whose Senior Helpers purchase, its seventh home-care and post-acute bet, put a 380-location franchised home-care system under private equity ownership.
- MedTec Healthcare (into Altocare) · 2025 · An in-home care and adult-day-services provider joining Senior Helpers under Waud's new Altocare home-care platform.
- 1 more confirmed on the firm's profile
Buyers is the shelf these come from, ordered by who closed something most recently.
How Big This Market Is
There are about 81,027 businesses in this industry. 46,063 of them (57%) have 5 to 99 employees: the band big enough to have something to sell, small enough to finance. Most of the rest are owner-operators with a job rather than a business to hand over.
Census County Business Patterns (2023). How often they change hands is in Market Depth.
Who the Law Lets Own This
States license or register home-care agencies; Medicaid personal care adds federal visit-verification requirements.
How buyers structure around it: Confirm every state license matches services delivered; W-2 caregiver models are what buyers and lenders expect.
Most of these rules are set state by state and change, so confirm the current one with the regulator that issues it and your attorney before it shapes an offer. Every trade with a recorded rule is on Ownership & License Rules.
What It Costs to Replace the Owner
The multiples above are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. Hire someone instead and the going rate for the role comes back out. For this trade that is usually the administrator of a clinic or care facility, paid a median of $123,860 a year nationally. Subtract it from SDE before applying any multiple, because at a 3x multiple that wage also takes about $371,580 off what the business is worth to you.
Medical and health services managers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits. Every role, and the same arithmetic worked end to end, is in Manager Wages.
How Often These Loans Go Bad
Of the 120 SBA acquisition loans in this industry old enough for most failures to have shown up, 3 were charged off: a rate of 2.50%. Across every industry we can measure, the pooled rate is 4.20%, so this one runs cooler than the average acquisition.
Computed from SBA loan-level data on a seasoned cohort. It counts loans already written off, so read it as a floor and as a ranking. Every industry's rate.
The Numbers That Run This Business
- Caregiver turnover and open shifts
- Billed hours by payer
- Client census and referral pipeline
- Missed-visit rate
- Time-to-fill for new caregivers