$5.9M
$571K
4.0x
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This is an established behavioral health and education company operating four licensed locations across Central Florida. The business provides Applied...
Why we like it
- Earnings quality is anchored in insurance-reimbursed clinical services with $5.94M of revenue across four locations, which is diversified across sites rather than dependent on a single clinic. ABA is medically necessary care for autism, so revenue tends to be sticky and recurring across multi-month treatment plans rather than one-off transactions.
- The moat here is real: ABA requires state licensure, credentialed BCBAs, payer contracts, and physical clinic infrastructure, all of which take years to assemble across four sites. A new entrant cannot simply spin up a competing four-location group overnight, and existing payer relationships create switching friction.
- Market tailwinds are structural and non-discretionary. Autism diagnoses continue to rise, most states mandate insurance coverage for ABA, and Central Florida is a high-growth population region, so demand is expanding faster than clinical supply can keep up.
- The operator advantage is spelled out in the 38-client waitlist. That is pre-sold demand sitting on the shelf, so an operator who fixes hiring and clinical throughput can grow revenue without spending a dollar on marketing, which is the cleanest form of upside a buyer can inherit.
How to improve it
- Attack the 38-client waitlist immediately by building an aggressive BCBA and RBT recruiting pipeline, since the binding constraint is clinical staff not demand. Every client converted off the waitlist is high-margin incremental revenue against a fixed clinic footprint.
- Audit billable hour utilization per clinician in the first 30 days and set utilization targets. In ABA the single biggest margin lever is the ratio of billed hours to paid hours, and a 9.6% cash flow margin suggests there is meaningful slack to recover.
- Renegotiate and diversify payer contracts, mapping reimbursement rates by insurer and pushing to raise the lowest-paying contracts or shift mix toward better payers. Reimbursement rate is the other primary margin driver and is often left untouched by clinician-owners.
- Tighten authorization and billing operations to reduce claim denials, lag, and unbilled sessions. Faster, cleaner revenue cycle management directly lifts collected revenue and cash flow without adding a single client.
- Standardize clinical and operational playbooks across all four sites so the strongest location's utilization and margin become the template for the others. Reducing site-to-site variance is where multi-location groups find their easiest gains.
- Evaluate adding a fifth location or expanding capacity at the site with the deepest waitlist, using the proven model to compound demand you already have. Organic expansion into existing demand is far cheaper than de novo builds into unproven markets.
Diligence notes
- Scrutinize payer mix and reimbursement rates in detail, including the split between commercial insurance and Medicaid, because Medicaid-heavy ABA revenue carries rate and policy risk that can compress margins overnight. Confirm all payer contracts are current and transferable.
- Verify clinical staffing stability, credentials, and turnover. ABA is notorious for high RBT churn, and the value of the waitlist evaporates if the business cannot retain and hire the BCBAs and RBTs needed to serve those clients.
- Validate the 38-client waitlist is real and convertible: confirm these are authorized or authorizable clients with verified benefits, not stale inquiries. Ask for the conversion rate on prior waitlisted clients to gauge how much of that demand is truly bankable.
- Examine the revenue cycle for denial rates, days sales outstanding, clawback exposure, and any history of payer audits or recoupments. In insurance-billed healthcare, aggressive or sloppy billing can create hidden liabilities that surface after close.
- Confirm state licensure and regulatory compliance at all four locations, plus any pending inspections or corrective actions. A lapse or violation at even one site can disrupt reimbursement and threaten the multi-location value proposition.
- Assess owner and key-clinician dependence given no seller transition terms are disclosed. Understand who holds the BCBA supervisory roles and payer relationships, and whether they stay post-close, because clinical leadership departures can destabilize the whole group.
Source
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