If you own a healthcare business—whether it’s a physician practice, behavioral health facility, DME company, diagnostic lab, or tech-enabled service organization—you may already be seeing increased acquisition activity. From private equity firms to strategic consolidators and health systems, buyers are actively pursuing providers with scalable operations, regulatory compliance, and growth potential.

At Silverman Bain LLP, we help healthcare business owners navigate these complex transactions with clarity and confidence. If you’re considering a sale or have already been approached, here is what you need to know before moving forward.

Buyers Are Looking for More Than Just Revenue

Today’s acquirers are not simply chasing profits. While a healthy bottom line is important, sophisticated buyers are increasingly focused on long-term value, operational sustainability, and strategic alignment. They are looking for businesses that provide competitive advantages, including access to key referral networks, favorable payer contracts, a strong geographic presence, or proprietary technology. These advantages support scalable growth post-acquisition.

Buyers want to avoid inheriting risk. A practice that appears profitable but is poorly documented, disorganized, or non-compliant may come with hidden liabilities that can jeopardize the buyer’s investment. On the other hand, a business that maintains clean financials, has a strong compliance program, and can demonstrate repeatable, well-managed operations will reduce post-close surprises. This gives the buyer confidence that the business can transition smoothly, retain its value, and continue to grow under new ownership.

For private equity and strategic consolidators alike, scalability is critical. If your systems are manual, your processes are undocumented, or your success depends too heavily on you personally, buyers may see your business as fragile or too difficult to integrate. On the flip side, a business with clear workflows, institutional knowledge, and minimal key-person risk is far more attractive, and typically receives more favorable valuation and deal terms.

If you’re even thinking about selling in the next two to three years, now is the time to prepare. That doesn’t just mean boosting revenue. It means investing in internal infrastructure, documenting procedures, strengthening compliance, and identifying areas where the business can function without you. Buyers are paying premiums for businesses that are both profitable and poised to grow with minimal disruption.

Legal and Compliance Diligence Is More Intense Than Ever

Buyers are conducting increasingly thorough reviews of legal and regulatory risk—especially in healthcare, where the margin for error is slim and the consequences of noncompliance are steep. Due diligence now routinely includes in-depth examinations of billing practices, licensure status, privacy safeguards, employee classifications, contractual relationships, and ownership history. Buyers are not just asking for documents. They’re asking whether your house is in order, whether it has ever been at risk, and whether it will create exposure post-closing.

Even minor red flags can cause meaningful problems. Inconsistent use of independent contractors outdated or missing governing documents, improper fee-splitting structures, or ambiguous “partner” or “affiliate” arrangements may raise regulatory concerns. If those issues aren’t identified and addressed in advance, you could face deal delays, valuation reductions, escrow holdbacks, or the buyer walking away entirely.

This is why legal and financial advisors should be brought in well before you formally take your business to market. Ideally, you should engage an attorney and financial advisor as soon as you’re considering a sale. Early planning allows you to run a pre-sale audit, identify soft spots in your structure, and resolve issues before they become bargaining chips for the buyer. It also gives you the flexibility to modernize contracts, clean up your books, and ensure that your licensure, compliance policies, and corporate documents are aligned and current.

Waiting until a buyer is already at the table puts you in a reactive position. You’ll be trying to fix problems under time pressure, which often means making concessions to get the deal done. By starting diligence prep early, you shift into a proactive posture. Presenting a clean, well-documented business commands confidence and protects your leverage throughout the deal process.

Deal Terms Often Matter More Than Price

It’s easy to focus on the top-line number in an acquisition offer, but what often matters more is how the deal is structured. The way the purchase price is paid and the conditions that come with it can significantly affect your final take-home and long-term liability.

Earnout provisions are one of the most common tools used by buyers to hedge risk, especially in healthcare transactions where future revenue may depend on referral patterns, regulatory approvals, or provider retention. An earnout ties a portion of the purchase price to future performance milestones. For example, a buyer may offer $2 million at closing with an additional $1 million payable over two years, contingent on the business hitting certain revenue, EBITDA, or clinical volume targets.

From a buyer’s perspective, earnouts ensure they are not overpaying for a business that underperforms post-closing. From a seller’s perspective, however, earnouts introduce both opportunity and risk. You may have limited control over how the business is operated after the sale, but your ability to collect the full price depends on the buyer’s decisions, staffing changes, or integration priorities. If the buyer restructures operations, drops a key contract, or deprioritizes your service line, you may miss the earnout through no fault of your own.

Earnouts also tend to generate disputes. If the performance metrics are not clearly defined, or if the calculation method allows for discretion or adjustments, you could end up in a disagreement over how much you’re owed. These provisions need to be drafted with precision, including detailed definitions, reporting requirements, and dispute resolution procedures.

Other deal terms (i.e., indemnification provisions, working capital adjustments, and escrow holdbacks) also carry real economic consequences. You may be required to reimburse the buyer for liabilities that emerge post-closing or leave part of your purchase price in escrow for 12–24 months as security against future claims.

That’s why it’s critical to work with counsel who not only understands M&A mechanics, but also knows the healthcare business you’re in. A well-structured deal is one that reflects how your business actually operates, protects you against unreasonable post-closing exposure, and puts you in a position to realize the full value of what you’ve built.

Regulatory Transitions Can Make or Break a Deal

In a healthcare transaction, signing the purchase agreement is only part of the process. Unlike deals in unregulated industries, where signing and closing can often occur on the same day, healthcare acquisitions are frequently bifurcated. This means that there is a gap between when the deal is signed and when it is officially closed. This structure gives the buyer and seller time to complete a series of regulatory, operational, and contractual requirements that must be satisfied before the buyer can legally own and operate the business.

During this interim period, regulatory steps like change-of-ownership (CHOW) filings, licensure updates, Medicaid or Medicare enrollment changes, and payor notifications must be submitted and (when necessary) approved. Each of these steps is jurisdiction-specific and entity-specific. For example, a behavioral health facility in Florida may need Agency for Health Care Administration (AHCA) CHOW approval before a new license is issued, while a DME company with federal billing privileges must complete CMS Form 855S to update its ownership and avoid reimbursement interruptions.

If these transitions are not handled correctly, closing can be delayed or the buyer may be unable to legally bill or operate the business even after paying for it. Some states impose civil penalties or operational suspensions if the new ownership takes control before proper filings are made or licenses are issued. That risk applies not just to buyers, but also to sellers who remain involved post-closing under an earnout or transition agreement.

Because of these complexities, it is essential to work with advisors who understand the regulatory landscape governing your specific type of healthcare business. That includes coordinating legal counsel, compliance consultants, and transaction advisors who can create a regulatory transition plan, work with the buyer’s team, and ensure that the deal structure aligns with licensing and payor timelines.

The goal is to ensure that the business remains fully operational and in compliance from Day One after closing: without interruptions to billing, staffing, or patient care. In healthcare, the deal isn’t done at signing. It’s done when the government says it is.

You Need a Healthcare Attorney (Not Just a Deal Lawyer)

While any experienced M&A attorney can help draft and negotiate a purchase agreement, a healthcare transaction carries industry-specific risks that a generalist will often miss. Healthcare is perhaps the most regulated industry in America. Issues like the corporate practice of medicine, change-of-ownership licensing, Stark and Anti-Kickback compliance, and Medicare or Medicaid enrollment are unique to this sector. If these items are not properly addressed during negotiations and closing, they can delay the transaction, trigger regulatory investigations, or jeopardize your ability to get paid post-sale.

For instance, a client thought to include us for a “quick review” of final documents prior to a sale of his laboratory. We recognized that, although Medicare had been informed, Medicaid and Florida’s Agency for Health Care Administration had not been provided with advance notice. Moreover, the lab’s accrediting body (Commission on Office Laboratory Accreditation) was not provided advance notice and was not on the closing checklist for immediate post-closing notice. Although our late entry caused a delay in closing, it ultimately preserved the lab’s Medicaid participation and protected its accreditation, outcomes that would have been jeopardized without intervention.

A healthcare attorney brings not only regulatory expertise, but also a working knowledge of how these transactions play out in the real world. They can anticipate pitfalls, streamline compliance transitions, and ensure that your deal structure reflects the realities of your business model.

Post-Sale Engagement Is Often Expected

Many buyers do not want the seller to disappear immediately after the deal closes. They expect the seller to stay involved during a transition period to preserve continuity with staff, patients, vendors, and payors. Your continued presence may also be critical to hitting performance targets tied to an earnout or to completing licensing transitions that legally require the seller’s cooperation. Whether formalized through a consulting agreement, a post-closing employment arrangement, or a board or leadership role, your involvement is often part of the deal’s value.

But staying on post-sale is rarely easy—especially for business owners who are used to being the final decision-maker. After closing, you are no longer in charge. You may still care deeply about the business, but the strategic direction, spending decisions, staffing changes, and even clinical or operational policies may now be dictated by someone else. For sellers who have built their companies from scratch or have managed every detail for years, that shift can be frustrating, disorienting, and even painful.

You may find yourself fielding questions from employees who still see you as the leader, only to realize you no longer have authority to give a definitive answer. You may disagree with the buyer’s decisions but be contractually obligated to support them. If your earnout depends on financial performance, the tension can be even greater—especially if the buyer’s actions undermine your ability to hit those targets.

That’s why it is critical to define your post-closing role with precision and to negotiate both authority and accountability boundaries upfront. Be honest with yourself about how much involvement you want, how much control you’re willing to give up, and what kind of working relationship you can tolerate. If you’re not comfortable becoming an employee or advisor in your own former business, you may need to structure the deal to allow for a faster exit or to limit your obligations to only the regulatory and operational necessities.

The more clearly your expectations are aligned with reality, the more successful and less stressful your post-closing experience will be.

Plan Early and Exit on Your Terms

Selling a healthcare business is a high-stakes decision. It deserves careful planning, experienced guidance, and a clear-eyed understanding of your goals. Whether you’re months or years away from a sale, the smartest time to prepare is now. The earlier you involve healthcare-specific legal and financial advisors, the more options you’ll have (and the more value you’re likely to retain).

At Silverman Bain LLP, we represent healthcare providers across the spectrum, including solo physicians to multi-site operators and healthcare tech companies. If you’re considering selling your business or want to prepare for a future exit, we’re here to help.