The sale of a care service is more than just a financial transaction – it usually involves the careful handover of a life’s work that has cared for numerous patients.
Selling a care service: Information and advice for owners
As the owner, you are faced with the challenge of handing over the business you have built up over the years into responsible hands. It is essential to secure the future of your employees and guarantee the high quality of care for your patients. At the same time, you need to ensure that the economic value of your care service is remunerated appropriately and in line with the market.
Our aim is to provide you with sound information and practical insights for a structured sales process as a solution approach. Whether an outpatient care service, inpatient facility or care home – every transaction requires an individual approach and careful planning.
Legal framework conditions, demographic changes and increasing quality requirements characterise the care environment. These factors influence the interest of potential buyers and therefore also the value of your company.
Based on our many years of experience in advising owners of outpatient care services and care facilities, we support you in successfully organising the sale. We offer you comprehensive information on all relevant aspects – from finding the purchase price, searching for a buyer and negotiating to the tax assessment and legal implementation of the sale.
Would you like to find out more about how you can optimally prepare and realise the sale of your care service? Contact us for a non-binding initial consultation.
Reasons for selling a care service
The sale of a care service can take place for various reasons, which are often closely linked to the owner’s personal or business situation. Over the course of their career, every entrepreneur faces a wide variety of challenges and opportunities that make a sale seem sensible. Here are some of the most common reasons why owners of care facilities take this step:
- Retirement and succession planning: many owners decide to sell their care business as part of their retirement planning. After years of dedicated work, you want to hand over your life’s work into competent hands. Early planning enables an orderly transition and secures the future of your company.
- Financial considerations: Financial considerations often play a decisive role. A lucrative sale can be used to achieve financial goals, reduce debt or invest in new projects. Especially in times of increasing demand for care services, the market value of a care service can be significant.
- Market changes: Changes in the market environment, such as legal changes, increasing competition or technological developments, can also lead to a decision to sell. In such situations, it may make sense to sell the company before the market value falls or further investment becomes necessary.
- Personal reasons: Personal motives for a sale should not be underestimated. Health issues, family changes or the desire for more free time can be decisive factors. Selling your care service opens up new personal perspectives for you.
Important considerations before the sales process
Before you take the step of selling your care service, there are several important considerations that you should bear in mind. This decision not only affects your personal future, but also that of your company and your employees.
- Personal and professional goals: Clarify your personal and professional goals. What do you plan to do after the sale? Do you want to retire completely from your professional life, or do you plan to enter a different industry or even start a new care service? The answer to these questions will not only influence your decision to sell, but also the way in which you approach the sales process.
- Future of the business and staff: A care service is more than just a business – it is a community built on the trust and hard work of staff and fulfils an important social function. Consider what impact the sale will have on the quality of care and the jobs of your staff. It is crucial to find a buyer who not only recognises the financial value of your business, but also appreciates and continues the culture and importance of the care service.
Addressing these questions will help you gain clarity about your motivations and expectations for the sale process. In this way, you can ensure that the sale of your care facility meets your individual needs and expectations.
Determine the value of the care service
The seller’s basis for negotiations with prospective buyers is knowledge of the value of his own company. A valuation or purchase price estimate prepared in advance is not shared with the prospective buyer. A realistic and well-founded valuation is decisive for the success of negotiations.
Importance of company valuation
The valuation of your care service is derived from the future viability of your company. It takes various factors into account in order to determine the value of your care service:
These key figures provide information about the financial performance of your care service.
They show the profitability and efficiency of your company.
A stable customer base is a valuable asset that increases the value of your care service.
A strong market position and a good reputation in the industry have a positive effect on the company’s value.
Qualified and motivated employees are a decisive success factor and contribute to the value of your company.
The entrepreneur’s salary is an important factor in the valuation, as it influences the profit. It is adjusted to the standard market level for calculation purposes.
Methods of company valuation:
Various valuation methods are used to determine the value of a care service. The choice of method depends on the specific situation and the available data.
- Multiplier method: This method is based on industry metrics and uses multipliers applied to sales, profit or other metrics of the care service. It is particularly useful in highly regulated industries such as care.
- Income capitalisation method: This involves estimating the future earnings of the business and discounting them to today’s value. This method takes into account future profit prospects and is particularly relevant if the care service generates stable and predictable income.
- Net asset value method: This method looks at the value of the company’s tangible and intangible assets.
The valuation of a care service requires industry knowledge and financial expertise. At LW-P Lüders Warneboldt, we have extensive experience in the valuation of companies in the care sector. Our experts support you in determining the true value of your care service and uncovering optimisation potential.
Would you like to have the value of your care service professionally determined? Take advantage of our offer and contact us for a well-founded and objective company valuation.
The sales process for care services at a glance
The sale process of a care service is a multi-stage procedure that requires careful planning and implementation. Our tasks as M&A consultants and interdisciplinary consulting network are
Preparation:
Preparation of sales documents: We create a comprehensive exposé that emphasises the strengths of your care service. This includes detailed financial information, details of the staff structure, customer base and market position.
Buyer search:
Identification of potential buyers: We analyse the market to find suitable interested parties. These can be strategic buyers from the care sector, financial investors or individuals who want to enter the care market.
Negotiations:
Due diligence: Potential buyers carry out due diligence to check all relevant information about your care service. Among other things, the finances, customer structure, employees and legal situation are scrutinised.
Contract negotiations: Based on the due diligence and the established sales documents, you negotiate the purchase price and contract terms with the buyer. In doing so, you should ensure fair and transparent communication.
Important contract components: The purchase agreement should regulate all key aspects of the sale, such as the purchase price, payment terms, transfer conditions and any liability issues.
Legal and tax aspects: We make sure that the purchase agreement complies with legal and tax requirements. Let one of our experienced lawyers and tax consultants advise you on this.
Conclusion of contract and handover:
After successful negotiations and completed due diligence, the contract is concluded. Plan the handover carefully to ensure a smooth transition. This includes informing employees, customers and business partners as well as familiarising the new owner.
Interdisciplinary support from LW-P Lüders Warneboldt
Selling your care service is a complex endeavour in which you should rely on professional support. LW-P Lüders Warneboldt offers you comprehensive support in this important step as an interdisciplinary consultancy network.
Advantages of working with M&A consultants:
- Expertise and market access: our team has knowledge of the care sector and the preparation and implementation of sales processes . We are familiar with current market trends, legal requirements and valuation methods. Thanks to our many years of experience, we have access to a network of potential buyers, which increases your chances of a successful sale.
- Maintaining confidentiality: Discretion is of the utmost importance when selling a care service. We guarantee absolute confidentiality throughout the entire sales process. Through our role as an intermediary, you can remain anonymous until there is a serious interest in buying.
Our advisory services :
Specialised M&A services for care services:
- Company valuation: We determine the realistic market value of your care service, taking into account all relevant factors.
- Preparation for sale: We support you in optimising your company for sale and prepare professional sales documents.
- Identifying and approaching buyers: We use our network to identify suitable buyers and make discreet initial contacts.
- Conducting negotiations: We represent your interests in all negotiation phases and endeavour to achieve the best possible sales conditions.
- Due diligence: We prepare you optimally for the buyerdue diligence and accompany you through this critical process.
- Legal and tax optimisation: In cooperation with our experts in tax and M&A law, we develop the most advantageous sales structure for you.
- Contract drafting and negotiation: We support you in drafting and negotiating the purchase agreement in order to protect your interests in the best possible way.
- Support until closing: We are at your side until the final handover of your care service and ensure that everything runs smoothly.
At LW-P Lüders Warneboldt, we see the sale of your care service not just as a transaction, but as the handover of your life’s work. Our aim is to achieve the best possible sale price and at the same time secure the future of your company, your employees and your patients.
FAQ - Frequently asked questions about selling a care service
Yes, care services and care homes can be sold. The sale of such facilities is a common procedure when owners wish to retire, reorient themselves professionally or decide to sell their business for other personal and financial reasons.
Selling a care service requires a structured approach. Firstly, you should have the value of your company determined, prepare a sales exposé and approach potential buyers. This is followed by negotiations, due diligence and finally the conclusion of the contract. Professional advice can help you to successfully organise the sales process.
The value of a care service depends on various factors, including turnover, profit margins, the number of patients cared for and the market position. The condition of the facility, the quality of the services and the satisfaction of employees and customers also play a role. A detailed company valuation is essential to determine the actual value.
The purchase agreement for a care service should be drawn up in collaboration with experienced lawyers and tax advisors. They will ensure that all relevant aspects are taken into account and that the contract is in your best interests.
The achievable selling price for your care service depends on various factors, such as the size and profitability of your company, the market situation and the conduct of negotiations. A realistic assessment of the company’s value is crucial in order to achieve an appropriate price.
Your contact persons
Oliver Warneboldt
Auditor, tax consultant, managing director
