Home Care / Home Health Diligence and Customer Concentration

by a searcher

3 months ago

Hello! I am diligencing a home care deal with a focus on private pay. Total T12 EBITDA was ~$1.5M. What are typical multiples for similar businesses in the space? How do you think about customer concentration with 5-10 cases representing >50% of revenue in a given year?

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searcher from The University of Michigan - Stephen M. Ross School of Business

Echoing others, I would also want to understand where those high hour cases are coming from. It's very different if they all came from the same referral source vs all being word of mouth or coming from diverse referral sources. You should also dig into their general standards on the types of clients they onboard and minimums. At that level of EBITDA, if 5-10 cases represents 50% of revenue they are likely accepting very low hour clients, which can be a problem
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2 months ago | like reply | 0 likes

searcher from University of Pennsylvania - The Wharton School

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2 months ago | like reply | 0 likes

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