Home Healthcare Franchise

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03/19/2021 Redacted Redacted

searcher The University of Chicago - Booth School of Business University of Illinois at Urbana-Champaign

Hi everyone,

I've been looking at home healthcare franchises in the 500K SDE range.  Curious what sort of multiples people are seeing here?  From what if seen the smaller ones 100-200K SDE are in the 2-3X range but wondering if that is reasonable here.
Thank you

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admin Massachusetts Institute of Technology - MIT Sloan School of Management Taylor University Stanford University - Graduate School of Business - 03/24/2021

Anonymous from Booth - BVR DEAL STATS has 1887 transactions for the higher level NAICS code (NAICS: 62) which includes Home Health Care (NAICS: [redacted]You can find BVR DEAL STATS under the VALUATIONS tab at the top of this page. Here is the direct link: https://www.searchfunder.com/bvr/sector/104

We're currently discussing a deeper integration with BVR that will allow Searchfund

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searcher Georgetown University University of Minnesota - Carlson School of Management - 03/24/2021

I've seen independent HHC businesses in the 500k-1M EBITDA range consistently go for 4-5x multiples. I don't have any experience with acquiring franchises though, so I don't know if there are any dynamics that would make their valuation different from an independent.

like reply | 2 likes

intermediary Indiana University at Bloomington Indiana University, Bloomington/Indianapolis - Kelley School of Business - 03/24/2021

It always gets down the the debt coverage ratio, how much you put down and bank loan metrics. If you are using an SBA, I always use 10% down, 10 yr. amort. SBA legal limit is 1.2 but never had a buy client pay more than 1.5X in debt coverage ratio. That is what I use for the highest that can be paid (and that is what the banks will look at as he who holds the Gold makes the rules). Then you have to look at all the soft factors as there is always a standard deviation of 25%+/-. Generally all

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professional Oregon State University - 03/24/2021

Hi! I did some searches in the DealStats database for home health comps between 500SDE and 1M SDE and came up with a average MVIC/EBITDA multiple of 4. I'm happy to discuss the database with you further if you have any questions.

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