Your Opinion: Assisted Living Center Experience anyone?

March 20, 2020

by a searcher from University of Massachusetts at Boston in Shrewsbury, MA, USA

I'm in the early stages of discussions and talking with a family run Assisted Living center. I plan on meeting with them in person next week.

Based on my limited knowledge of Assisted Living centers, I'm reaching out to ask if anyone is familiar with these types of businesses & if so, what things should I be aware of, or looking out for?

Maybe, some questions I should be asking over and above the standard questions.

Are these good businesses to buy?

Any assistance would be greatly appreciated!

Reply by a searcher
from Harvard University in Arlington, MA, USA

I don't have specific operational experience, but have some cursory knowledge through friends' experiences putting their parents into homes. Overall the industry will only grow as Baby Boomers age. Quality and pricing is widely ranging in the industry so you'll need to make sure they have a solid reputation and staff (good nurses are hard to find). Insurance costs can be high. Understand what their core client segment is and see if there's opportunity for a roll-up strategy, aka creating a chain of them. If you can get a group of a dozen of these, I think you can have a nice exit in small cap PE firms that specialize in healthcare plays. Lastly, figure out what their rent or real estate cost is, as that's a core part of their business.

Reply by a professional
from Villanova University in New York, NY, USA

Bradley, my firm has LTC/assisted living facility clients (accounting and tax) and we also provide financial due diligence on such facilities during a transaction. Feel free to reach out. I'd be happy to help.

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