"What multiple can I expect?" It's the first question every home care agency owner asks when considering a sale. The honest answer is: it depends. But after analyzing recent transaction data and speaking with active buyers, here's what the market actually looks like in 2025-2026—and what drives the difference between a 3x and a 7x multiple.
Key Insight: The Multiple Range Is Wide
Home care agency valuations range from 2x to 10x+ EBITDA depending on size, type, payer mix, and operational factors. Understanding where your agency falls in this range—and what you can do to move up—is essential for realistic planning and effective preparation.
Current Market Multiples by Agency Type
The home care industry encompasses several distinct business models, each with different valuation dynamics. Understanding these distinctions is crucial for setting realistic expectations.
Medical Home Health (Skilled Nursing)
Medicare-certified agencies providing skilled nursing, physical therapy, occupational therapy, speech therapy, and other clinical services under physician orders. These agencies operate under PDGM (Patient-Driven Groupings Model) reimbursement and face regulatory scrutiny including HHVBP (Home Health Value-Based Purchasing).
| Agency Size | Revenue Range | Typical Multiple | Premium Range |
|---|---|---|---|
| Single-Branch / Small | < $5M | 3x – 6x EBITDA | Up to 7x |
| Regional Multi-Branch | $5M – $25M | 6x – 9x EBITDA | Up to 10x |
| Scaled / Multi-State | > $25M | 9x – 12x+ EBITDA | 12x+ |
Non-Medical Personal Care (Private Duty)
Agencies providing assistance with activities of daily living (ADLs), companionship, and homemaker services. These are typically non-clinical services delivered by caregivers/aides, funded by private pay, Medicaid waiver programs, or long-term care insurance.
| Agency Size | Typical Multiple | Premium Range | Key Drivers |
|---|---|---|---|
| Small / Single-Market | 3x – 5x EBITDA | Up to 6x | Private pay %, retention |
| Regional Operators | 5x – 8x EBITDA | Up to 9x | Scheduling efficiency, scale |
| Scaled Platforms | 7x – 10x EBITDA | 10x+ | Technology, payer relationships |
Source: Scope Research, July 2025; HealthFMV, October 2025
Small Agency Cash Flow Multiples
For smaller agencies (typically under $1M revenue), valuations are often expressed as multiples of Seller's Discretionary Earnings (SDE) or cash flow rather than EBITDA. Based on analysis of current listings and recent sales:
25th Percentile
2.1x
Cash Flow
Median
3.0x
Cash Flow
75th Percentile
4.0x
Cash Flow
What Drives a Higher Multiple?
Understanding the factors that drive premium valuations allows you to focus your preparation efforts where they'll have the most impact. Here are the key value drivers, ranked by typical impact:
Scale ($1M+ EBITDA)
Larger agencies attract more buyers, including private equity firms who can pay premiums. The jump from sub-$500K EBITDA to $1M+ often adds 1-2x to your multiple. At $3M+ EBITDA, you're in platform territory with access to the highest multiples.
Impact: +1.0x to +2.0x
Diversified Payer Mix (Private Pay Dominant)
Private pay commands the highest multiples due to better margins, no regulatory risk, and pricing flexibility. A mix of private pay + Medicare + Medicaid waiver is ideal. Heavy Medicaid-only concentration typically results in discounted multiples due to rate risk.
Impact: +0.5x to +1.5x
Strong Management Team (Low Owner Dependency)
Businesses that run without the owner are worth significantly more than owner-dependent operations. A proven management team that will stay post-acquisition reduces transition risk and justifies premium pricing. Learn how to achieve this in our guide on Reducing Owner Dependency.
Impact: +0.5x to +1.0x
Consistent Growth (3+ Years of 10%+ Growth)
A track record of consistent revenue and earnings growth signals a healthy, growing business with momentum. Buyers pay for trajectory, not just current performance.
Impact: +0.25x to +0.75x
Clean Compliance Record
No surveys with conditions, no OIG issues, no billing irregularities, no pending litigation. Compliance problems are deal-killers or result in significant discounts and escrow holdbacks.
Impact: +0.25x to +0.5x (or -1.0x+ if problems exist)
What Drives a Lower Multiple?
High Owner Dependency
If you are the business—if key relationships, decisions, and knowledge exist only in your head—buyers see significant transition risk. This is one of the most common and costly valuation issues. See our 7 Common Exit Mistakes guide for more pitfalls to avoid.
Impact: -0.5x to -1.0x
Revenue or Referral Concentration
One referral source or client representing 20%+ of revenue is a red flag. Buyers will either discount the offer or structure earnouts around retention of the concentrated relationships.
Impact: -0.25x to -0.75x
Declining Metrics
Shrinking census, falling margins, or increasing caregiver turnover signal problems. Buyers pay for momentum; decline creates concern about what's causing the deterioration.
Impact: -0.5x to -1.0x
Messy Financials
Commingled personal/business expenses, unclear add-backs, cash-basis accounting, or inconsistent reporting creates uncertainty. Buyers discount for uncertainty or walk away entirely.
Impact: -0.25x to -0.5x (or deal failure)
The Bottom Line: Multiples Are a Starting Point
The difference between a 3x and a 5x multiple on $500K EBITDA is $1 million. That's worth understanding what drives your specific number—and what you could do to improve it over the next 12-24 months.
Don't anchor on headlines or conference chatter. Understand the factors that apply to your specific situation, and focus your preparation efforts on the areas that will have the most impact on your valuation.