Home Care Agency Valuation Multiples 2026: What is Your Business Worth?
If you own a home care agency generating $1M to $15M in revenue, you are operating in one of the most active healthcare M&A markets. Private equity firms and strategic acquirers have been aggressively consolidating home care providers, and 2026 is shaping up to be another strong year for deal activity.
But what is your home care agency actually worth? And how do buyers arrive at that number?
This guide breaks down how to value your home care agency, what multiples buyers are paying, and what you can do now to position your business for a premium exit.
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Why Home Care Agencies Are in Demand
Home care sits at the intersection of two powerful demographic and healthcare trends: an aging population and a shift toward lower-cost care settings.
By 2030, all Baby Boomers will be over 65, creating unprecedented demand for senior care services. At the same time, healthcare systems are actively pushing patients out of expensive hospital and nursing home settings into more cost-effective home-based care.
Private equity has recognized this opportunity. Platforms like Addus HomeCare, BrightSpring Health, and Help at Home have spent billions acquiring home care agencies to build regional and national footprints. According to Home Health Care News, PE-backed consolidators completed record numbers of home care acquisitions in 2024 and 2025.
The demand is driven by several factors:
Demographic tailwinds: The 65+ population is the fastest-growing age segment in the U.S.
Cost-effective care: Home care costs a fraction of nursing home or hospital care.
Patient preference: Seniors overwhelmingly prefer to age in place at home.
Reimbursement support: Medicare Advantage and Medicaid waiver programs are expanding home care coverage.
Fragmented market: Thousands of local agencies create consolidation opportunities.
Types of Home Care and How They Are Valued
Best for: Solo practitioners, owner-dependent practices, owners who prioritize continuity.
Before discussing multiples, it is important to distinguish between the different types of home care businesses, as they are valued differently.
Non-medical home care (personal care/companion care):
These agencies provide assistance with activities of daily living like bathing, dressing, meal preparation, and companionship. They typically do not require clinical licenses and are often private pay or Medicaid-funded.
Home health care (skilled nursing):
These agencies provide clinical services like skilled nursing, physical therapy, and wound care. They require state licenses and often Medicare certification. Home health is more heavily regulated but also commands higher reimbursement rates.
Hospice:
These agencies provide end-of-life care and are Medicare-certified. Hospice is a distinct category with its own valuation dynamics.
This article focuses primarily on non-medical home care and home health agencies.
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How Buyers Value Home Care Agencies
Most home care agency valuations are based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). EBITDA represents the cash flow available to a buyer after operating expenses but before financing and accounting adjustments.
For smaller, owner-operated agencies, buyers may use SDE (Seller's Discretionary Earnings), which adds back the owner's salary and benefits.
According to industry transaction data, home care agencies are achieving strong multiples, particularly those with diversified payor mixes and strong referral relationships. The key factors that determine where your agency falls on the valuation spectrum include:
Payor mix: Agencies with diversified revenue across private pay, Medicare, and Medicaid command premiums.
Licensure and certification: Medicare-certified home health agencies are valued higher than non-certified agencies.
Census stability: Consistent patient census with low turnover signals operational strength.
Referral relationships: Established hospital and physician referral networks are valuable assets.
Geographic footprint: Agencies in high-growth markets or underserved areas attract premiums.
Caregiver retention: Low caregiver turnover is a significant differentiator in a tight labor market.
A small non-medical home care agency with $300K in EBITDA and high owner dependency might sell for 3x to 4x, or $900K to $1.2M. A Medicare-certified home health agency with $1.5M in EBITDA, strong referral relationships, and professional management could command 6x to 8x, or $9M to $12M.
2026 EBITDA Multiples for Home Care Agencies
Based on recent transaction data and industry reports, here is what buyers are paying in 2026:
Source: Multiples based on home care industry transaction data from Mertz Taggart, Braff Group, and announced platform acquisitions
The Medicare Certification Premium
In the home care industry, Medicare certification is one of the most significant valuation drivers. Buyers are willing to pay substantial premiums for certified agencies for several reasons:
Higher reimbursement rates: Medicare pays significantly more per visit than Medicaid or private pay sources.
Barrier to entry: Obtaining Medicare certification requires a lengthy application process, survey, and accreditation. This creates a moat that protects certified agencies from competition.
Referral network access: Hospitals and physicians prefer to refer to Medicare-certified agencies because they can serve the broadest patient population.
Scalability: Medicare certification allows agencies to serve more patient types and expand into higher-acuity services.
A Medicare-certified home health agency might command multiples 1.5x to 2x higher than a non-certified agency with similar EBITDA.
The Valuation Drivers That Matter Most
Beyond EBITDA and certification status, sophisticated buyers evaluate several qualitative factors that can move your multiple up or down by 1–2 turns.
1. Payor Mix Diversification
Agencies that rely too heavily on a single payor source face valuation discounts. A healthy payor mix might include 40% Medicare, 30% Medicaid, and 30% private pay. This diversification protects against reimbursement rate changes in any single program.
2. Referral Source Concentration
If 50% of your referrals come from a single hospital or physician group, buyers will be concerned about what happens if that relationship changes. Diversified referral sources reduce risk and support higher valuations.
3. Caregiver and Clinician Retention
Home care is a people business, and caregiver turnover is the industry's biggest challenge. Agencies with caregiver turnover below 50% (the industry average is often 60–80%) are significantly more attractive to buyers.
4. Quality Metrics and Star Ratings
For Medicare-certified agencies, CMS star ratings and quality metrics are closely scrutinized. Higher star ratings correlate with better referral volumes and patient outcomes, both of which support premium valuations.
5. Compliance History
Home care is a heavily regulated industry. Agencies with clean survey histories and no significant compliance issues command premiums. Past deficiencies or sanctions can result in substantial valuation discounts.
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Common Valuation Mistakes to Avoid
Mistake 1: Ignoring Census Trends
Buyers will look at your patient census over the past 24–36 months. Declining census is a red flag that will result in valuation discounts, even if current EBITDA is strong.
Mistake 2: Underinvesting in Compliance
Skimping on compliance and documentation creates risk that buyers will uncover during due diligence. A clean compliance history is worth more than most owners realize.
Mistake 3: Referral Source Dependency
If your business depends on a few key referral relationships, especially relationships managed personally by the owner, buyers will discount the purchase price to account for the risk of losing those referrals.
How Deal Structure Affects Your Take-Home
A $6 million offer is not always $6 million in your bank account on closing day. In the home care industry, deals typically include some structure.
You should expect something like this:
60–75% Cash at Close: The guaranteed money.
10–20% Seller Note: A loan you give the buyer, paid back over 2–4 years with interest.
10–20% Earnout: Tied to census retention, referral relationship retention, or revenue targets in the first 12–24 months post-sale.
Earnouts in home care deals are often tied to maintaining census levels and key referral relationships. If patient volumes drop significantly post-sale, the earnout may be reduced.
Preparing for a 2026 Exit
If you are eyeing an exit in 2026, you cannot wait until the month you want to sell to start preparing. The market is active, but it favors the prepared.
To get the highest multiple, focus on three areas:
Stabilize and grow census. Consistent patient census over 12–24 months is critical. If your census has been volatile, focus on stabilizing it before going to market. Growth is even better.
Diversify referral sources. If you rely heavily on a few key referral relationships, work to broaden your referral network. Add new hospital partnerships, physician relationships, and community referral sources.
Document everything. Clean up your clinical documentation, compliance records, and financial statements. Ensure your Medicare cost reports (if applicable) are accurate and timely. Having organized records accelerates due diligence and builds buyer confidence.
Selling a home care agency is different from selling other healthcare businesses. The combination of demographic tailwinds, regulatory complexity, and labor challenges creates unique valuation dynamics. By focusing on census stability, payor diversification, and compliance excellence, you can position your agency not just to sell, but to exit at a premium.
You Don't Have to Figure This Out Alone
If you are thinking about selling your home care agency and want to understand what it could be worth, schedule a confidential valuation consultation with our team. We will walk you through the process, answer your questions, and help you plan your next steps — no pressure, no obligations.
FAQs
What multiple should I expect for my home care agency?
Most home care agencies trade between 3x to 7x EBITDA, depending on size, certification status, payor mix, and quality metrics. Medicare-certified agencies with scale can achieve 7x to 10x.
How important is Medicare certification to my valuation?
Very. Medicare-certified home health agencies typically command multiples 1.5x to 2x higher than non-certified agencies. The certification creates barriers to entry and enables higher reimbursement rates.
Do buyers value non-medical home care differently than home health?
Yes. Non-medical home care agencies typically trade at lower multiples (3x to 5x) than Medicare-certified home health agencies (5x to 8x) because of lower reimbursement rates and fewer barriers to entry.
What caregiver turnover rate do buyers want to see?
Buyers look for caregiver turnover below 50%. The industry average is often 60–80%, so agencies with lower turnover are significantly more attractive.
How far in advance should I start preparing for an exit?
Ideally 12–24 months. That gives you time to stabilize census, diversify referral sources, clean up compliance records, and strengthen financials before buyers start diligence.
Will I get all cash at closing?
Most home care deals include some structure beyond cash at close. Expect a combination of 60–75% cash, a seller note paid over 2–4 years, and an earnout tied to census or referral retention. A strong agency with low risk can negotiate a higher cash percentage.
What if my agency is heavily dependent on one referral source?
Buyers will discount the valuation to account for concentration risk. Before going to market, work to diversify your referral relationships across multiple hospitals, physician groups, and community sources.
Recommended Reading
Should You Sell Your Business to Private Equity? — Understand how PE firms evaluate and structure acquisitions, and whether a PE buyer is the right fit for your agency.
Selling a Services Business? Read This Before You Sign Anything — Key considerations for services business owners entering the M&A process.
How to Prepare Your Business For Sale — A step-by-step guide to getting your business exit-ready.
The PE Playbook: 9 Attacks Private Equity Use to Lower Your Valuation — Protect yourself from common buyer tactics during negotiations.
Private Equity Rollovers: How to Sell Your Company Twice — Learn how rollover equity can multiply your total exit value.
Key Takeaways
EBITDA is the foundation. Home care agencies are valued on a multiple of EBITDA, typically ranging from 3x to 8x depending on size, certification, and quality.
Medicare certification matters. Certified home health agencies command multiples 1.5x to 2x higher than non-certified agencies.
Payor mix is key. Diversified revenue across Medicare, Medicaid, and private pay reduces risk and supports higher valuations.
Caregiver retention is critical. Agencies with below-average caregiver turnover are significantly more attractive to buyers.
Expect structure. Offers will likely include seller notes and earnouts tied to census and referral retention.
Start preparing early. Give yourself 12–24 months to stabilize census, diversify referrals, and clean up compliance before going to market.
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