Selling a Care Service: The Most Important Steps to a Successful Business Sale

Selling a Care Service: The Most Important Steps to a Successful Business Sale

Selling a care service is a complex process that requires careful preparation and a structured approach. With the right steps, you can achieve the best possible value — and make the transition smooth for everyone involved.

Valuation of the Care Service

A well-founded valuation is the first and most important step in the sales process. Both measurable and qualitative factors contribute to determining the company's value.

Hard Factors

These criteria are objectively measurable and have a direct influence on the purchase price:

• Revenue and income – Total earnings from care services rendered
• Profit and profitability – Operating result after deducting all costs
• Patient and client base – Size and stability of the client portfolio
• Number of employees and qualifications – Number of staff, qualification level and staff turnover
• Locations and geographic coverage – Number and distribution of operational sites
• Range of services – Breadth of offerings (outpatient care, support services, specialist therapies)
• Contracts with health insurers – Existing agreements with cost carriers
• Quality ratings and certifications – MDK grades, quality management status
• External presence and digital visibility – Website, review portals, online presence
• Technology and equipment – Use of modern care software and working tools
• Legal compliance – Adherence to all statutory requirements and licences

Soft Factors

Beyond the numbers, qualitative characteristics also play a decisive role in the attractiveness of a care service:

• Reputation – Standing in the community, among clients and as an employer
• Professional competence of the team – Qualifications, experience and specialisation of care staff
• Working atmosphere – Employee satisfaction, collaboration and company culture
• Degree of innovation – Willingness to implement new technologies and care concepts
• Client orientation – Alignment with the individual needs of patients
• Owner dependency – The less the business depends on the current owner, the more attractive it is to buyers

Overview of Valuation Methods

Various recognised methods are used to determine value. The choice depends on the individual case, the company structure and the seller's objectives:

• Net asset value method – Calculates the minimum material value based on assets minus liabilities.
• Earnings value method (DCF) – Values future expected earnings and discounts them to their present value. Particularly relevant for stable cash flows.
• Market comparison method – Based on comparable transactions in the care market and provides insight into market-standard valuation levels.

The precise valuation should always be carried out by experienced M&A advisors or independent experts with industry knowledge — an inaccurate assessment can lead to considerable financial disadvantages.

Identifying Value-Reducing Factors

During the valuation process, so-called "red flags" may become visible — factors that reduce the purchase price or, in the worst case, make a sale more difficult. These include high staff turnover, poor MDK ratings, outdated infrastructure or a strong dependency on the owner.

We recommend starting preparations for the sale early, specifically addressing any identified weaknesses and implementing value-enhancing measures — before the first buyer looks at the books.

Note: This article is part of our healthcare sector series. Contact us at valuation@adamsstrategy.de for M&A consulting in the care sector.