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6 Considerations When Choosing a Home-Based Care M&A Advisor

Updated: 7 days ago

Headline: 6 Considerations When Choosing a Home-Based Care M&A Advisor

If you’re an agency owner, you may be getting overwhelmed with emails and phone calls from brokers, M&A advisors (and increasingly, buyers themselves) with catchy subject lines, or lofty promises tied to an unnamed buyer (or buyers), which can at times be hard to ignore.


If you are considering an exit or sale, how do you decide who deserves your response?  Let’s start with this fact: Finding a quality buyer for your agency is the (relatively) easy part. Maximizing value, getting a transaction through diligence, successfully executing a purchase agreement, and closing on the transaction with few or no surprises takes skill, foresight, healthy respect from the buyer universe, and relentless advocacy on your behalf.

Deciding to take your agency to market is often the biggest decision of an owner's career. Running a competitive process to maximize value is almost always the best decision (Do What the Pros Do) but choosing the best firm to represent you is equally important.

Some of the key factors to consider are:

1. Respect/Credibility from the Buyer Universe: 

The firm representing you and your business must have earned respect from the buyer universe. The credibility of the firm representing you will ultimately correlate with the buyer's confidence in marketing materials, adjustments, and negotiations. Buyers respond positively to established firms that prioritize advocating for their clients throughout the entire process while adding value to the transaction. Working towards the best deal for a client could extend or draw out a deal, but this advocacy creates a firm tone and respect from buyers. 

2. Customized Confidential Approach

Every M&A transaction is unique, and a good advisor will tailor their approach to your specific needs and goals. Confidentiality is paramount to a successful transaction. An advisor should prioritize confidentiality to protect the business during the period in which a transaction will take place. Oftentimes, online listings or blasts about a business going to market will give competitors and other agencies in the local market clues that your business is being sold, which can negatively impact your operations, staffing, and flow of referrals. Business owners will have different wishes and goals with an exit so while running a competitive process will always extract the most value, it can look different based on your business, objectives, and timeframe. 

3. Track Record

Assess the M&A advisor's track record in successfully completing transactions in the healthcare sector, particularly within the home-based care industry. Look for evidence of their ability to facilitate deals, negotiate favorable terms, and achieve positive client outcomes. Client testimonials and case studies can provide valuable insights into their past performance. 

4. Candor

Engaging with an advisor is a commitment. Trust and integrity are critical in the M&A process. Most engagements include a one-year term plus a commitment to the firm for 18-24 months for those buyers the firm has “introduced” to the seller (also known as a tail period). Be sure the firm is not selling you on an inflated valuation just to lock you into this agreement. The right firm will create a competitive process among the best buyers in the industry and allow the market to decide value. If it sounds too good to be true…

5. Strong Communication and Negotiation Skills

Effective communication and negotiation skills are vital in M&A transactions. The advisor should be a strong communicator who can articulate complex concepts clearly, facilitate discussions between parties, and advocate for your interests. They should also possess excellent negotiation skills to secure favorable terms and resolve any conflicts arising during the deal process.

6. Industry Expertise

It is crucial that the M&A advisor has deep knowledge and understanding of the home-based care industry. They should be familiar with the market dynamics, regulations, trends, and key players within the sector. This expertise will help them identify potential opportunities, evaluate potential acquirers accurately, and navigate the industry's complexities.


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