Contracted Healthcare Coordination & Billing Services, 30-Year Texas Operator

$38.4M

Revenue

$7.9M

SDE

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Full Editorial Writeup

This is a 30-year-old healthcare services company that provides contracted healthcare coordination and related support services to institutional and government-related customers. The engine of the business is a proprietary software platform paired with a massive contractor workforce: 23 full-time and 2 part-time employees oversee 3,672 contractors who deliver the actual end-user services. That structure keeps fixed payroll light while flexing capacity up and down with contract volume, which is exactly how you want a labor-heavy services book built.

The economics are serious. On $38.4M of revenue the business throws off $7.9M of SDE and $5.8M of EBITDA, roughly a 15% EBITDA margin, with the seller citing recurring institutional and government-related demand. Revenue is tied to compliance-driven outsourcing and service coordination, the kind of spend that institutions and government payers keep funding through a downturn because it is contractually and regulatorily required.

The seller is retiring and prefers a strategic buyer, offering up to 10% seller financing and a transition of up to 6 to 12 months. Real estate is owned and will be leased to the buyer (or possibly sold separately), so the operations are relocatable. The obvious question a buyer must answer is customer and contract concentration, because government-related revenue at this scale usually means a handful of large contracts carry the P&L.

Why we like it

Earnings quality is strong on paper: $7.9M SDE and $5.8M EBITDA on $38.4M revenue with only $7,500 of FF&E means this is a pure cash-flow business, not an asset story. The 30-year operating history and long-standing customer relationships suggest the earnings are repeatable rather than a one-year spike.
The moat is a combination of proprietary software, a mature contractor network of 3,672 people, and entrenched institutional and government contracts. Government and institutional buyers are slow to switch vendors given compliance requirements and procurement friction, which creates real stickiness and high renewal odds.
Market tailwinds favor outsourced healthcare coordination: institutions keep pushing non-core services to specialized vendors, and compliance and reporting demands only grow. That structural outsourcing trend supports contract volume regardless of the broader economy.
The labor model is capital-light and scalable. With just 25 W-2 staff managing thousands of contractors, incremental contracts drop through at attractive margins, and a buyer can add service lines or geographies without building heavy fixed infrastructure.

How to improve it

Map the customer and contract base in the first 30 days and build a renewal and expansion pipeline. If a few large government-related contracts drive most revenue, the priority is locking in multi-year renewals and cross-selling adjacent service lines to those same accounts.
Productize and license the proprietary software separately. The seller calls it the most valuable asset, so packaging it as a standalone offering or SaaS layer for other regional providers could open a higher-margin, recurring revenue stream on top of services.
Tighten contractor management and unit economics. With 3,672 contractors, small improvements in fill rates, retention, and pay-versus-bill spreads compound quickly across the base and directly widen the 15% EBITDA margin.
Pursue additional government and institutional contracts through disciplined bidding. The company already holds the credentials and track record, so a dedicated proposal and capture function could convert operating history into a repeatable new-contract engine.
Expand geographically by leveraging the relocatable, multi-state platform. Entering adjacent states with existing systems and playbooks is a lower-risk growth path than building new service categories from scratch.
Build a light management layer to reduce owner dependency before the seller's transition ends. Documenting processes and installing a general manager protects continuity and makes the business more valuable and more financeable at exit.

Diligence notes

Concentration is the single biggest question. Get a customer-by-customer and contract-by-contract revenue breakdown, because government-related revenue at $38M often means two or three contracts carry the business, and losing one would gut the SDE.
Scrutinize contractor classification. With 3,672 people classified as contractors rather than employees, misclassification exposure under federal and state labor rules is a material liability, and reclassification would blow up the light-payroll margin story.
Validate the government contract vehicles and renewal terms. Confirm which contracts are competitively re-bid, their expiration dates, incumbency advantages, and whether any are set-asides tied to certifications that may not transfer to a new owner.
Confirm the SDE-to-EBITDA bridge and quality of earnings. The $2.1M gap between $7.9M SDE and $5.8M EBITDA needs full documentation of owner add-backs, and the $44,000 monthly rent on the owned building must be tested as a true market lease post-sale.
Assess software ownership and defensibility. Since the proprietary platform is described as the most valuable asset, verify IP ownership, that it is not dependent on the departing owner, and whether it is documented and maintainable by a new technical team.

Source

Originally listed on BizBuySell. View original listing →