Knowing Your Multiple Isn’t the Same as Knowing Your Market
- 10 hours ago
- 7 min read
By Cory Mertz, M&AMI | Managing Partner | Mertz Taggart | May 2026
At a Glance Home care agency owners have more access to deal data than ever, from published multiples to transaction announcements to AI-generated market summaries. But access to information isn’t the same as having leverage in a negotiation. Buyers know what they are willing to pay for your agency. They also know what you do not know. A competitive, advisor-led process is the mechanism that closes the information gap between sellers and buyers, and it is consistently the difference between an adequate outcome and a top-of-market one. |
I talk to home care agency owners every week who tell me they already know what their company is worth. They have read the industry benchmarks. They have seen the deal announcements. Some have run their own numbers through AI tools.
The information is more accessible than it has ever been. But knowing what range the home care sector trades in and knowing what a motivated buyer will actually pay for your agency are two very different things.
That second number only reveals itself when buyers are competing against each other. And the gap between what a buyer offers when they are the only one at the table and what they will pay when three or four others are in the room is not small. In a recent deal, we received twenty-three indications of interest on a single company. The lowest came in at roughly 40% of the highest. Every one of those buyers had the same information about the business. The difference wasn’t what they knew. It was what they stood to lose.
What Do Buyers Know That You Don’t?
When a buyer contacts you about your home care agency, they have already done more preparation than most owners realize. They know which geographies they need to fill. They know what their portfolio is missing. They know what their investors expect in terms of returns and timeline. And they know, within a tight range, what they have paid for agencies like yours in the past.
You typically know none of that. You don’t know what the buyer paid for their last acquisition. You don’t know how urgently their fund needs to deploy capital. You don’t know whether your geography, your payer mix, or your caregiver retention metrics fill a gap that is worth a premium to them. And you do not know whether another buyer would value those same attributes even more.
This isn’t a reflection on the seller. It is the nature of the situation. Buyers are professional dealmakers who do this every day. Most agency owners are selling for the first and only time. Even when both sides are acting in good faith, that is not an even playing field.
Why “Knowing the Multiples” Can Work Against You
An increasingly common pattern: an owner reads that home care companies are trading at a certain range of SDE or EBITDA multiples. A buyer calls and offers something within that range. The owner thinks that is within the benchmarks, so it is probably fair.
But “within the range” and “what the market would actually bear for this specific agency” are not the same thing. A published range reflects the full spread of outcomes across deals of varying quality, size, and competitive dynamics. It does not tell you where your agency falls in that spread. And it does not tell you whether the right buyer, under competitive pressure, would go above the range entirely.
The bigger risk is subtler. When an owner anchors to a number from a report, they stop asking whether more is possible. They evaluate the offer against the published range instead of against what the market would produce under competitive conditions. And once that frame of reference is set, it is very hard to undo.
Worse, when an owner shares their expectations with a buyer, even casually, they create a ceiling. The buyer now has a target to negotiate around rather than a market to compete in.
→ Related: If a Buyer Approaches You Directly, a Competitive Process Will Almost Always Get You More Money
Why This Matters More Now Than Five Years Ago
The buyer landscape in home care has shifted considerably. Non-medical home care led M&A transaction volume for eight consecutive quarters through mid-2025, and the sector continues to attract significant private equity interest. New platform investments have created a wave of PE-backed buyers actively pursuing add-on acquisitions to build scale in key markets.
Several forces are driving that demand. Aging demographics continue to increase the need for in-home services. Medicaid rate improvements in a number of states have strengthened margins for agencies with meaningful Medicaid exposure. And agencies with strong caregiver recruitment and retention programs are commanding particular attention from buyers who understand that workforce stability is one of the hardest assets to build from scratch.
At the same time, agency owners are being contacted more frequently and from more directions than ever before. Private equity groups, strategic buyers, independent sponsors, search funds, even brokers prospecting for a listing. The volume of inbound interest can make an owner feel like they already have options.
But receiving interest isn’t the same as creating competition. A competitive process takes that scattered interest and turns it into something actionable: multiple qualified buyers, on the same timeline, evaluating the same materials, with clear deadlines to submit their best terms. That structure is what changes behavior.
What a Competitive Process Tells You About Your Own Agency
Running a process doesn’t just produce a better price. It tells you things about your agency that you cannot learn any other way.
A financial buyer building a home care platform will value your agency differently than a strategic buyer expanding into your geography. A buyer looking for Medicaid-heavy volume will see a very different opportunity than one focused on private-pay clients. An operator who values your caregiver training program and low turnover may see something that a generalist fund overlooks entirely.
You cannot discover any of that by talking to one buyer. You discover it by putting the agency in front of a curated group of qualified acquirers and letting them show you what they see. The result isn’t just a higher number. It is a better understanding of where the real value in your agency lives, and that changes how you negotiate everything that follows.
What You Will Never Find Out Going Direct
When a seller closes a direct deal, they walk away believing they got a good outcome. And they may have. But they will never know for sure, because they never tested it.
They won’t know that the buyer who approached them was already prepared to bid significantly higher if there had been competition. They won’t know that a different buyer, one they had never heard of, would have valued their service area or their referral relationships at a meaningful premium. They won’t know that the deal structure they accepted was something the buyer would have improved considerably to win a competitive process.
That is the real cost of going direct. It isn’t just what you leave on the table. It is that you never see the full table. You make the most consequential financial decision of your career with a fraction of the information you could have had.
For most home care agency owners, 80 to 95 percent of their net worth is tied up in the business. That is not a decision that should come down to how one buyer happened to frame their opening offer.
The Cost of Getting It Almost Right
The hardest situation isn’t the owner who gets a bad offer and knows it. It is the owner who gets a reasonable one. An offer within the published range can feel like validation. It may even feel generous compared to what the owner expected.
But if the market would have produced a significantly higher outcome under competitive conditions, that gap is not a rounding error. On a home care agency generating $2 to $3 million in adjusted earnings, even a modest difference in multiples translates to real, irreversible dollars. That is a different retirement. A different outcome for the family. And once the deal closes, there is no going back to test whether more was available.
The information to make a better decision exists. It just does not show up in a Google search or a buyer’s opening phone call. It shows up when you put your agency in front of the right buyers, under the right conditions, with someone in your corner who has been through this before.
Key Takeaways
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For over twenty years, Mertz Taggart has advised home health, home care, and hospice owners on sell-side transactions. If you are weighing your options, whether a buyer has already reached out or you are just starting to think about what comes next, we are happy to have a confidential conversation.
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About the Author
Cory Mertz, M&AMI, is a managing partner at Mertz Taggart, where he advises home health, home care, and hospice owners on selling their businesses. With over two decades in healthcare M&A and firsthand experience owning and operating a healthcare business, Cory brings a practitioner’s perspective to every engagement.
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