NEMT business valuation: what companies sell for and what raises or cuts the multiple

A NEMT company is worth what a buyer expects it to earn after the seller leaves, priced as a multiple of today’s earnings and adjusted for the risks that are specific to Medicaid transportation. The vans set a floor. The contracts, records, and people decide how far above it the price goes.

This page is about the number itself. For preparing a company and running the sale, see selling a NEMT business. For the buyer’s checks and financing, see buying a NEMT business.

How is a NEMT business valued?

Appraisers use three approaches and weigh them against each other. The IRS’s own business valuation guidelines name them as the asset-based approach, the market approach, and the income approach, and tell its appraisers to consider all three before choosing.

• Market approach. What similar companies sold for, expressed as a multiple of earnings. This is the number brokers quote, and for a small NEMT company it usually leads the conversation.
• Income approach. Expected earnings turned into a present value with a rate that reflects risk. The IRS guidelines tie that rate to the nature of the business, its industry, the risk involved, and how stable or irregular its earnings are.
• Asset approach. The vans, lifts, and equipment at what they would bring, less debt. For a NEMT company this is the floor. If the earnings-based value comes out below the fleet’s resale value, the buyer is paying for vans and getting the contracts for nothing.

The same guidelines list what an appraiser should study: the company’s history, the outlook for its industry, its financial condition, its earning capacity, and whether it has goodwill. For a NEMT company, the industry outlook means your state’s rates, your brokers, and your payers’ contract terms.

Seller’s discretionary earnings, worked through

Seller’s discretionary earnings (SDE) is the earnings figure brokers use for companies selling under $2 million. The IBBA, the business brokers’ association, defines it as earnings before income taxes, nonrecurring items, depreciation and amortization, interest, one owner’s entire compensation including benefits, and personal expenses run through the business. It shows how much cash one full-time owner would have to work with.

Here is an example for an eight-van wheelchair and ambulatory company. The tax return shows $102,000 of pre-tax profit. Add back:

• The owner’s salary and payroll taxes: $68,000.
• The owner’s health insurance: $14,000.
• Depreciation on the vans: $92,000.
• Interest on van loans: $19,000.
• A one-time legal bill from a contract dispute: $8,000.
• Personal costs on the company card, a family phone plan and a personal car: $7,000.

That makes SDE of $310,000. Every add-back needs paper behind it, an invoice for the one-time bill and statements for the personal costs, because a buyer’s SBA lender will check the figures against the seller’s IRS transcripts.

Depreciation is the add-back to question

In a van company, depreciation stands for a real bill that comes due. On September 28, 2026, the General Services Administration signed an order worth $70,740 for a full-size, rear-lift van that carries two wheelchairs. At that price, replacing eight vans on a six-year cycle costs about $94,320 a year. SDE adds depreciation back, so a buyer has to put the replacement cost back in. A fleet of new vans is worth more than the same earnings from a fleet that needs replacing next year. The yearly cost of keeping one lift van on the road is broken down in the wheelchair van operating cost guide.

What are NEMT companies selling for?

Business brokers’ survey data gives the current range by deal size. These figures cover small businesses of all kinds, not NEMT companies alone. The IBBA and M&A Source Market Pulse survey for the second quarter of 2026 drew on 255 brokers and advisors who completed 181 transactions, and reported these multiples:

Applied to the example’s $310,000 of SDE, 2.8 gives $868,000, which sits inside the $500,000 to $1 million band that multiple came from. The same company could reasonably be argued anywhere from about $620,000 to $961,000 using the neighboring multiples. The risks in the next section decide where.

The same survey asked advisors where buyer interest is moving. Transportation and logistics businesses scored below zero on its net buyer-interest scale in both size groups, while healthcare services scored well above zero. A NEMT company is both, which is a reason to present it the way health care buyers read a company: contracted payers, credentialed drivers, and complete trip records.

What raises or cuts the multiple

Inside a range, risk moves the price. These are the risks a NEMT buyer prices first. Several have their own guides, linked here.

• Contracts that must be signed again. Under MTM’s standard agreement, changing the owner, the federal tax ID, or the legal name requires a new contract with MTM, and the existing one cannot be assigned without MTM’s written consent. In an asset purchase, the buyer usually needs its own Medicaid enrollment as well. A trip book that depends on approvals the buyer does not yet have is worth less until they arrive. See buying a NEMT business.
• One payer carrying the company. MTM’s agreement promises no trip volume, and either party can end it on 30 days’ notice, so revenue from one broker carries more risk than the same revenue spread across several. Selling a NEMT business works through how buyers discount it, and the payer mix guide helps you put a number on your own concentration.
• An owner who is the business. Profit that depends on you holding every relationship fades when you leave, and a buyer prices it that way.
• Money that can still be taken back. Open audits, payment holds, and overpayment letters turn into escrow or a lower price. See Medicaid recoupment.
• Fleet age and lift condition. Vans due for replacement are a cost the buyer pays right after closing, as the depreciation section shows. See selling a used wheelchair van for what an older van brings.
• Where the rates are heading. A buyer prices next year’s revenue, not last year’s. Indiana’s 2027 NEMT schedule, for example, sets the wheelchair van base at $32.71 from January 1, 2027, up from $31.79.
• Trip records that prove the revenue. Paid trips without logs and signatures are revenue an auditor can take back. See NEMT documentation requirements.

The lender’s limit on the price

When the buyer finances the purchase through SBA’s 7(a) program, the lender’s valuation caps what can be paid with borrowed money. SOP 50 10 8.1, which took effect on October 1, 2026, sets these rules:

• The valuation must be requested by and prepared for the lender. A valuation done for the buyer or the seller does not count.
• Above a $350,000 purchase price, it must come from an independent appraiser holding an ASA, CBA, ABV, CVA, or BCA credential. A lender may do its own valuation for a smaller deal, at a purchase price up to $350,000, but not when the two sides have a close relationship.
• It must put separate values on the equipment and the intangible assets.
• Total debt for the purchase, including any seller note that is not on full standby, cannot exceed the valuation. Anything paid above it has to come from equity, such as the buyer’s cash or a seller note that receives no payments until the SBA loan is repaid.

The other loan rules (equity, seller notes, the seller’s role after closing) are in buying a NEMT business. The cash flow test is the one that bites on price. For an outside buyer, an initial acquisition in SBA’s terms, the business has to earn 1.25 times its loan payments, and a change-of-ownership loan amortizes over 10 years at most.

Run the example through it. At $868,000 with 10 percent down, the buyer borrows $781,200. Over 10 years at an example rate of 10 percent, payments come to about $123,900 a year. If the buyer pays a manager $70,000 to do the seller’s job, $240,000 is left to cover them, which is 1.94 times the payments and clears the lender’s test. Set aside the $94,320 a year for vans and coverage falls to 1.18. The lender may approve that price. A careful buyer sees little room in it.

Valuing for a partner buyout or an estate

A partner buyout or an owner’s estate needs a value too, and it may not match a sale price. Estate tax uses fair market value. In Connelly v. United States (2024), the Supreme Court held that life insurance a company holds to buy back a deceased owner’s shares is a company asset in that value, which raised the estate’s tax bill in that case. How to fund a buyout without that result is covered in succession planning for a NEMT business, and the buy-sell terms two owners should sign are in the guide for co-owners.

Numbers a valuation can lean on

A buyer, a lender’s appraiser, and an estate’s appraiser all start by asking for revenue by payer and the proof behind it. HealthRide’s payer summary breaks each payer out for any period: trips completed, trips canceled, revenue billed, and the balance still owed. Trip logs with GPS-recorded miles and signatures export as a spreadsheet or a PDF. That is the history a valuation is built on, ready the day someone asks. See reports.