Return To Opportunities List

Opportunities

Home Health Care Focused on OT and PT

CASH FLOW
$586,212

Specifications

  • Price
    $2,300,000

  • Revenue
    $1,816,515

  • Equipment
    $50,000

  • Location
    Omaha

  • Service Area
    Omaha (8 counties), Iowa (1 county)

  • Reason for Sale
    New ventures

  • Profit Margin
    32%

  • Employees
    23: OT (3), PT Assistants (3), RN (3), LPS (2), Home Health Aide (6), Administrator (1), admin staff (5 FT, 1PT), Speech Therapist (1)

  • Intangible Assets
    Numerous positive relationships with assisted living facilities, nursing homes, health care facilities, etc.; positive customer reviews

Providing exceptional and personal care is what this business does best.  With many services available, this short-term home health provider is able to address the needs of its patients with the highest quality of care.  After receiving orders from a physician, this team can provide occupational therapy, physical therapy, speech therapy, skilled nursing, medication assistance, companion services, as well as help with social services.  Services are only provided in a patient’s home or living facility.

 

The knowledgeable, licensed, and well-trained team can provide care 24-hours a day.  Working together, this group determines the necessary services for each patient.  With therapists on staff (occupational, physical, and speech), as well as RNs and home health aides, patients with medical and therapeutic needs are in good hands.  An additional team of home health aides is available to assist individuals with daily living needs

 

Very active in the community, this business has a strong presence in local care facilities.  They provide recreational opportunities to residents to not only build their client base, but to enrich the lives of their patients and their friends. 

 

With an administrator managing the day-to-day operations, a new owner could take on a caseload if they are a practitioner or an oversight role.

Business Highlights

  • Year Established: 2008
  • Location: Omaha
  • Service Area:  Omaha (8 counties), Iowa (1 county)
  • Services:  Speech therapy, occupational therapy, physical therapy, skilled nursing, companion services, medication aides
  • Client Demographics: Post-op patients, orthopedic patients, stroke patients, seniors
  • Enrollment: 100+ patients
  • Building: 2,400 sq. ft.; offices, kitchen, break room, and reception – patients do not come to the office
  • Reason for Selling: New ventures
  • Employees: 23: OT (3), PT Assistants (3), RN (3), Home Health Aide (6), Administrator (1), admin staff (5 FT, 1PT), Speech Therapist (1)
  • Hours: Office: M-F 8:30-4:30; Care: 24-hours
  • Seller Training Period: 90 days transition – will assist in hiring and training replacement therapists
  • Growth Opportunities: Add staff to increase capacity, expand to additional counties
  • Current Owner’s Responsibilities: Two owners oversee the business and direct marketing efforts

Financial Highlights

  • List Price: $2,300,000
  • Gross Sales:
    • 2017: $1,816,515
    • 2016: $1,716,487
    • 2015: $1,618,891
    • 2014: $1,089,691
  • Cash Flow:
    • 2017: $586,212
    • 2016: $580,560
    • 2015: $561,022
    • 2014: $353,091
  • Assets Included in Purchase*
    • Equipment and Inventory: $50,000: Standard FF&E, projectors, medical supplies and equipment
    • Intangible Assets: Numerous positive relationships with assisted living facilities, nursing homes, health care facilities, etc.; positive customer reviews

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnTax ReturnNotes
2017201620152014
GROSS SALES$1,816,515$1,716,487$1,618,891$1,089,691
Net Income Shown on Financial Statement$299,060$216,554$401,501$153,239
ADDBACKS
Compensation to Owner$160,800$134,480$120,687$153,157
11% Tax on total W2 Salaries$17,688$14,792$13,276$16,847
Depreciation$294$555$704$908Non-Cash Item
Interest$81,656$1,129$484$4,422Non-Onward Going Expense
Non-Business Telephone$3,000$3,000$3,000$3,000Personal Cell Phone
Insurance Premiums for Owners: Health, Life, Auto$15,000$15,000$15,000$15,000
Meals & Entertainment$3,714$1,050$1,370$1,518
Employee Benefit Plan$5,000$5,000$5,000$5,000
One Time Expense$0$189,000$0$0Medical Records - $20,000, Office Supplies $19,000, Rent $30,000, Wages $120,000 for New Startup Expenses - Non-Onward Going
TOTAL ADDBACKS$287,152$364,006$159,521$199,852
Seller's Cash Flow = Total Addbacks + Net Income$586,212$580,560$561,022$353,091
Profit Margin32.27 %33.82 %34.65 %32.40 %
  • 32% profit margin in 2017
  • If you are not a physical therapist, the cash flow would be $526,000 annually to replace the two owners’ physical therapy responsibilities.

Typical Clients

  • Individuals needing short-term home health services 
  • Elderly individuals 
  • Orthopedic patients 
  • Stroke patients 
  • Patients in recovery at home after major surgeries 
  • Those needing home-based therapies 
  • Those needing companion services 
  • Those needing assistant with daily living needs 
  • Those needing medication assistance

Services

  • Speech therapy: 3% 
  • Occupational therapy: 27% 
  • Physical therapy: 45% 
  • Skilled nursing: 22% 
  • Companion services 
  • Medication aides

Employees

Employees: 23

  • Occupational Therapists (3)
  • Physical Therapy Assistants (3)
  • Director of Nursing (1)
  • Registered Nurses (2)
  • Licensed Practical Nurses (2)
  • Home Health Aides (6)
  • Administrator (1)
  • Administration staff (5 FT, 1PT)
  • Speech Therapist (1)

Growth Opportunities

  • Add staff to increase capacity 
  • Expand to additional counties 
  • Expand marketing efforts 
  • Increase social media engagement with caregivers or providers

Valuation Details

The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business. 

The formula used is as follows:

Cash Flow       x          Prescribed Multiple     =          Fair Market Value

Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.

A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.

For this business, a 2017 Cash Flow was used with a prescribed multiple is 3.93.  With this information, the computation is as follows:

$586,212         x          3.93     =          $2,303,813

The Fair Market Value found above positions the business List Price at $2,300,000.

Funding Example

Purchase Price:                             $2,300,000

10% Buyer Down Payment:             $230,000

15% Seller Financing:                      $345,000

75% Bank Loan:                             $1,725,000

Seller Financing 6-year term at a rate of 5% equals a monthly loan payment of $5,556.

Bank Loan 10-year term at a rate of 6% equals a monthly loan payment of $19,151.

After business expenses and loan payments, a buyer with a 10% down payment of $230,000 would retain a profit of $289,725, which results in a 126% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $2,300,000 with the terms listed above, the coverage ratio is 1.98. 

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

 

Purchase Price:

$2,300,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

Offer Price: $

% Buyer Cash Down at Closing: $

% Seller Carry Back via Promissory Note: $

year term at a rate of %

% of Purchase Price secured by Buyer and Seller

Total Bank Loan Need: $

% of Purchase Price

Desired Loan Type:

Desired Bank Terms: year term at a rate of %

Total Business Assets, Inventory, and A/R: $

Total Undercollateralized Loan: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2017 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

Attachments

Document Title / Description

This folder is empty.

Access to this Deal Room is restricted

Would you like to access the deal room?

Yes, please

Interested in
this business?

Complete the following information to sign an NDA and see more details!

Already have an account? Log in here.

Click to download NDA form

Print, sign and send to:

210 N 78th St. 2nd Floor
Omaha, NE 68114

Or fax to:

f 402.939.0857

Thinking of Selling?
The top 5 questions to ask any potential broker:


The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.