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5 Things Every Care-at-Home Agency Owner Should Consider Before Their Exit

White Mertz Taggart Logo on a blue background with the title text 5 things every agency owner should consider before their exit

For an agency owner, exiting their business can feel like abandoning a child. It is a very emotional but critical decision that should be conducted with great planning and sophistication to obtain the best outcome. There are many things to consider before an exit, but after 130+ successful healthcare services M&A transactions, we've narrowed the list down to the top five we recommend every agency owner should consider before their exit. Here they are:

1. Outline the goals and objectives of the exit strategy

Determine what's most important to you and organize it in order of importance. Here are some questions to consider:

  • How much money will I get after taxes?

  • Will the legacy of the business be maintained?

  • Will employees have a job, and will company culture remain?

  • Do I want to stay with the business for a period that extends past a 'transitionary period'?

2. Distance yourself from the agency's day-to-day operations

“Care-at-Home investors are highly sensitive to transition risk. In other words, risk that the business will deteriorate after a closing,” according to Cory Mertz, Managing Partner, “ And after the owner has received a substantial payout.”

Delegating responsibilities can be extremely challenging. However, separating yourself from the agency's operations will add flexibility to your options upon exit and could add value to your agency.

3. Define your ideal buyer/investor profile

Choosing the right buyer or investor with whom to partner — instead of simply selecting the highest offer — can provide many benefits throughout and after the transaction. A buyer who has experience with home care, home health, or hospice transactions, plenty of cash on hand, and a healthy credit line will have a higher certainty of closing the deal. The right buyer will strive to maintain or improve the service quality while caring for your employees.

4. Engage a professional, industry-experienced, and well-educated M&A advisory firm with a proven track record

An M&A advisory firm that specializes in home care, home health, and hospice will guide and prepare you for a sale that maximizes value and fulfills your goals and objectives. Finding the right buyer and compelling them to make their highest offer can only be done through a well-run, competitive M&A process. Preparing the marketing materials, financial model, and information for due diligence is exceptionally time-consuming and taxing. An M&A advisory firm can provide the additional bandwidth necessary to prepare all the M&A materials while you keep growing your agency. We have listed some of the benefits of engaging a specialized M&A advisory firm here.

5. Ensure easy access to critical, common, diligence information such as accurate financials, operational metrics, licenses, etc.

If you engage with an M&A firm to lead the process, most of the heavy lifting will be off your shoulders. However, you will need to provide the requested information for the M&A advisory firm to create all the necessary materials for a successful process and transaction. Therefore, assuring the data is clean, accurate, and accessible will put you ahead.

Considering the five items listed above will better prepare every agency owner to plan and execute a successful exit strategy.

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