Residential Behavioral Health & Accredited Education Provider, 25-Year Utah Operation with Real Estate

$2.2M

Revenue

$780K

SDE

6.3x

Multiple

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Full Editorial Writeup

This is a 25-plus year residential behavioral health and accredited education business in Brigham City, Utah, serving adolescent clients through an integrated model that combines residential treatment, substance-use programming, behavioral health services, and accredited secondary education. The operation runs out of two owned properties and is staffed by roughly 40 people, including a full clinical, administrative, and educational team that is expected to stay through and after the transaction. Admissions flow in from an unusually diversified set of channels: private-pay families, insurance, school districts, education consultants, professional referrals, tribal relationships, and national benefit programs.

The headline number here is capacity. The business historically ran a census of 50 to 70-plus residents but currently sits around 30 to 36, meaning roughly half the revenue-generating capacity of the platform is sitting idle while the fixed cost base (facilities, licensing, accreditation, management team) is largely already carried. On $2.16m of revenue the business throws off $780k of owner cash flow and $415k of EBITDA, and the asking price of $4.9m includes $2.6m of real estate. Strip the real estate and you are effectively paying roughly $2.3m for an operating business producing $415k of EBITDA, which is a reasonable entry multiple for a licensed, accredited, half-empty facility.

What makes this notable is the combination of a defensible regulatory moat (state licensing plus clinical and educational accreditations that take years to build), an established multi-state referral network, and a clear, mechanical growth lever in filling existing beds. The sale is driven by owner health issues, and the current owners are absentee, so the platform already runs without a hands-on founder, which lowers key-person risk for a new operator.

Why we like it

Earnings quality is anchored by a diversified payer mix spanning private-pay, insurance, school districts, tribal, and national benefit programs, which reduces reliance on any single reimbursement source. At $780k SDE on $2.16m revenue the margins are healthy, and the recurring nature of enrolled residents (multi-month stays billed continuously) means revenue is far stickier than a one-off transactional service.
The moat is real and hard to replicate: 25-plus years of operating history, state licensing, and recognized clinical plus educational accreditations create meaningful barriers to entry. A new competitor cannot simply open the doors, they must clear regulatory hurdles and build referral trust over years, which this business already has locked in across multiple states.
Demand tailwinds favor adolescent behavioral health and substance-use treatment, a category with persistent and arguably growing need regardless of the economic cycle. Families and referral partners do not defer treatment for a child in crisis, making this among the more recession-resistant corners of healthcare.
The operator advantage is the empty beds. Running 30 to 36 residents against a historical census of 50 to 70-plus means the platform can nearly double enrollment using the existing facilities, staff, licensing, and accreditation, converting incremental revenue almost straight to the bottom line without a proportional cost increase.

How to improve it

Rebuild the referral engine immediately by re-engaging education consultants, school districts, and professional referral sources that historically filled beds. These relationships are the primary admissions driver in this space, and a focused business development push in the first 90 days directly attacks the census gap.
Launch a disciplined digital marketing and inquiry-conversion program, since the listing explicitly flags weak conversion as a growth constraint. Install a CRM to track every inquiry from first contact to admission, measure conversion rates by channel, and staff intake to respond within hours rather than days.
Audit and optimize the payer mix and reimbursement rates across insurance and national benefit programs. With capacity to add 20 to 30 residents, ensuring contracts are priced correctly and claims are billed and collected efficiently can lift both revenue per resident and cash conversion.
Retain and incentivize the existing clinical and management team through the transition, because in a licensed care setting the staff and their credentials are the business. Structure retention agreements for key clinical and educational leaders before close to protect accreditation continuity and census stability.
Model a census recovery plan with clear milestones toward the 60-resident target management cites as achievable. Tie business development spend and staffing additions to enrollment thresholds so incremental cost is added only as beds fill, protecting margin during the ramp.
Evaluate a real estate separation via sale-leaseback once operations stabilize. The $2.6m of owned property is a large chunk of the purchase price, and refinancing or leasing it back could free capital to fund the growth push while preserving control of the facilities.

Diligence notes

Scrutinize why census fell from 50 to 70-plus down to 30 to 36. The owners cite health issues and absentee ownership, but a buyer must confirm the decline is a business-development and attention problem rather than a reputational, regulatory, or clinical-outcomes issue that would make beds hard to refill.
Verify all state licenses and clinical plus educational accreditations are current, transferable, and free of outstanding compliance actions. In residential adolescent care, any lapse, citation, or pending investigation can halt admissions overnight, so pull the full regulatory and survey history.
Break down revenue by payer channel and by resident to test concentration and reimbursement durability. Understand how much comes from private-pay versus insurance versus tribal and national benefit programs, and confirm those contracts survive a change of ownership.
Confirm the real estate valuation of roughly $2.6m with an independent appraisal, and understand what portion of the $4.9m ask is operations versus property. The reconciliation matters because it changes the effective operating multiple and drives financing structure.
Assess the durability of the management and clinical team given the owners are absentee. Identify key-person dependencies, tenure, compensation, and whether the team can actually execute a census ramp, since the growth thesis rests entirely on their continuity and capability.

Source

Originally listed on BizBuySell. View original listing →