South Florida Behavioral Health & Community Services Provider, 14-Year CARF-Accredited Practice

$3.9M

Revenue

$910K

SDE

4.0x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a 14-year-old behavioral health and community services provider operating in South Florida, delivering psychiatric services, psychotherapy, psychosocial rehabilitation (PSR), and targeted case management (TCM) across children, adolescents, adults, and families. The business serves roughly 1,000 clients annually and runs on a foundation of CARF accreditation and AHCA licensing, which function as regulatory moats that take years and significant effort for a new entrant to replicate.

The economics are the headline. On $3.94M of revenue the business throws off $910K in cash flow, a 23% margin that is strong for a behavioral health services operation. Management attributes a recent margin step-up to increased Medicaid and Medicare reimbursement rates flowing through to profitability, which is a structural tailwind rather than a one-time event. Diversified referral sources (hospitals, schools, courts, healthcare providers) and established insurance relationships reduce single-channel risk.

At a $3.65M ask and a 4.01x cash flow multiple, this is priced as a going-concern services business with embedded licensing value. It fits two buyer profiles cleanly: an existing healthcare organization bolting on South Florida capacity and payer relationships, or a platform buyer who wants a licensed, accredited behavioral health base to build a roll-up around in a fragmented, demand-heavy category.

Why we like it

Earnings quality is genuinely strong: $910K of cash flow on $3.94M of revenue is a 23% margin, and the business is cash-generative from recurring Medicaid and Medicare reimbursement rather than discretionary consumer spend. The recent margin lift is tied to reimbursement rate increases, which are structural and durable rather than a one-off.
The moat is regulatory and relational. CARF accreditation and AHCA licensing are expensive and slow to obtain, and the 14-year track record has built established insurance contracts and diversified referral pipelines across hospitals, schools, courts, and providers. A new entrant cannot simply open a door and compete; they need the credentials and the referral trust this business already owns.
Behavioral health demand is counter-cyclical and structurally rising. Mental health needs do not shrink in a recession, and payer coverage for these services has expanded, so the category benefits from both demographic demand and reimbursement tailwinds. Serving children through adults with multiple service lines spreads the revenue base across populations and funding sources.
Revenue is effectively recurring through ongoing case management, PSR, and insurance-reimbursed care relationships rather than one-and-done transactions. Roughly 1,000 clients annually with court, school, and hospital referral sources means a replenishing pipeline that an operator can systematize and grow with modest marketing effort.

How to improve it

Audit payer mix and reimbursement rates line by line in the first 90 days, then pursue rate renegotiations and ensure the business is billing every eligible code for PSR and TCM. The recent margin gain came from reimbursement increases, so tightening billing and coding discipline can capture incremental dollars already on the table.
Expand the referral engine deliberately by assigning ownership to hospital, school, court, and provider relationships. The listing flags these as growth levers, so a dedicated intake and referral coordinator with a simple CRM and follow-up cadence can convert existing goodwill into higher client volume.
Build out pediatric services, which the seller explicitly names as an opportunity. Pediatric behavioral health has strong demand and often favorable reimbursement, and the existing licensing and accreditation let you add capacity without rebuilding the compliance infrastructure.
Reduce clinician turnover and dependency risk by formalizing compensation, caseload standards, and a hiring pipeline. In behavioral health, revenue is capacity-constrained by licensed staff, so retention and recruiting directly drive top-line growth and protect against key-person disruption.
Standardize documentation and compliance workflows to protect CARF and AHCA status and minimize claim denials. Denied or delayed Medicaid claims are a silent margin killer, and clean documentation also de-risks the asset for a future exit or roll-up.
Explore adding complementary service lines or satellite locations within South Florida to leverage the accredited platform. Geographic density around existing referral sources can grow revenue with shared back-office and compliance overhead.
Implement basic financial and operational dashboards tracking client volume, no-show rates, days-to-reimbursement, and revenue per clinician. The business appears to run without sophisticated reporting, and visibility into these metrics is the fastest path to margin and capacity gains.

Diligence notes

Scrutinize payer concentration and the sustainability of the reimbursement rate increases that drove recent margin improvement. Medicaid and Medicare rates are set politically and can be cut, so confirm what portion of the $910K cash flow depends on rates that could reverse, and normalize earnings accordingly.
Verify the 2026 interim financials, which are only through September and show improved margins. Annualize carefully and confirm the improvement is structural rather than a timing effect on claims collections, and reconcile reported cash flow against tax returns and bank deposits.
Confirm CARF accreditation and AHCA licensing are current, transferable, and in good standing with no pending violations or corrective action plans. These credentials are the core of the moat, and any gap in compliance history could threaten the asset's value and continuity.
Assess clinician and staff dependency, including which providers generate the most billable revenue and whether any are planning to leave with the owner. Behavioral health revenue is people-dependent, so quantify key-person risk and confirm retention plans before closing.
Examine claim denial rates, days in accounts receivable, and any history of audits, clawbacks, or recoupment demands from Medicaid or Medicare. Reimbursement-based businesses carry audit and repayment exposure that can materially impair cash flow after a sale.
Clarify the seller's role, time commitment, and reason for selling, plus whether referral relationships are institutional or tied to the owner personally. Referral durability post-close is the single biggest determinant of whether the diversified pipeline survives the transition.

Source

Originally listed on BizBuySell. View original listing →