Care Home Acquisition
Due Diligence
Independent financial due diligence before you buy, fund or invest in a care home. We test whether the earnings you are paying for are real, and whether they will repeat under your ownership.
What is financial due diligence on a care home acquisition?
Financial due diligence on a care home acquisition tests whether the earnings you are paying for are real and repeatable. It covers normalised EBITDA, occupancy and fee mix, staffing and agency costs, local authority and NHS receivables, CQC status and its financial consequences, and the rent or property position. It is separate from legal due diligence, which examines title, contracts and employment.
Key Ledgers Global · Last updated 24 September 2026
Finance led by someone
who runs it.
Key Ledgers Global currently operates at Group CFO level within a 15-entity care and property group: 117-bed nursing home, 140 supported living beds, 500+ properties, £55m+ revenue.
Live operational experience informing every care home finance instruction we take. Not textbook advisory.
Discuss an Acquisition →What financial due diligence covers.
A seller presents the numbers in their best light. Due diligence rebuilds them from source records and tests what will carry over to you.
Reported earnings adjusted for owner costs, one-off items, agency peaks and fee timing, with each adjustment supported. See how care home EBITDA is calculated, including a worked example.
Occupancy trend by bed type, and the split between private, local authority and NHS funded residents, with the average weekly fee for each.
Permanent, agency and management costs against the level of care delivered. Agency spend is the item most likely to hide a weakness.
Local authority and NHS debtor ageing, disputed fees, and the risk that income recorded has not been or will not be paid.
The current rating, open actions and the cost of remediation, because the rating affects occupancy, fee rates and lender appetite. See how CQC rating affects value and finance.
Rent or property costs, lease terms, the maintenance backlog and the capital spending needed to keep the home compliant.
Red flags we look for.
None of these ends a deal by itself. Each one is a reason to reprice, restructure or ask a further question before you commit.
Profit lifted by a backdated fee uplift, a grant or an unusually low cost month.
Lower agency cost that reflects lower occupancy rather than better staffing.
Receivables that have been outstanding for months and are still counted as income.
Earnings that depend on the owner working unpaid or below market pay, so that a new operator's true cost is higher.
Findings that require spending the forecast does not include.
What you receive.
The output is designed to be used in the negotiation and in the funder conversation, not filed.
| Deliverable | What it gives you |
|---|---|
| A normalised EBITDA bridge | Reported to normalised earnings, with each adjustment and its supporting evidence |
| Price and structure points | Findings that support a price adjustment, a retention or protection in the sale agreement |
| A funder-ready summary | The financial position in the form lenders expect, to support acquisition finance |
| A list of open questions | Items to put to the seller before completion |
Active. Not
theoretical.
Bharat Varsani currently serves as Group CFO to a 15-entity care and property group, 117-bed nursing home, 140 supported living beds, 500+ properties. This is live, operational experience at group level, and it informs every care home instruction we take.
Group CFO to a care and property group means we know what the numbers look like from the inside, and where sellers' figures tend to flatter.
We act for the buyer, funder or investor, and have no interest in the deal completing.
Familiar with what lenders test when they size debt on a care home. See the business plan a lender expects.
Experience across care operations and property, so rent and property positions are read alongside the operating numbers.
Healthcare finance demands sector expertise. We don't advise on this sector from the outside, we operate within it at group CFO level.
Bharat Varsani FCCAGroup CFO, 15-Entity Care & Property GroupCare home due diligence
questions answered.
If your question is not covered below, contact us directly and we will respond the same working day.
It is an independent review of a care home's financial information before you buy, fund or invest. It tests the quality of earnings, occupancy and fee mix, staffing and agency costs, receivables, CQC status and the property position, so that the price and the financing rest on figures that will repeat under your ownership.
Legal due diligence examines title, leases, contracts and employment matters. Commercial due diligence looks at the market and the home's position in it. Financial due diligence tests the numbers: quality of earnings, cash, debt and working capital. A buyer normally needs all three.
Normalised EBITDA is reported earnings adjusted for owner costs, one-off items, agency peaks and fee timing. Lenders size debt from it and buyers apply a multiple to it, so every pound of EBITDA that is disallowed removes several pounds of value. See how care home EBITDA is calculated.
Common ones include earnings lifted by one-off items, agency spend that falls only because beds are empty, aged local authority or NHS debt counted as income, earnings that depend on an owner working below market pay, and a CQC action plan with no budget.
Buyers, lenders and investors. Buyers use it to price the deal and decide whether to proceed. Funders use it to size and structure debt.
The rating affects occupancy, fee rates and lender appetite, so it changes both the risk and the price. A Requires Improvement or Inadequate rating usually needs a costed improvement plan. See how CQC rating affects value and finance.
Other practice areas you may need.
Pre-Investment Due Diligence
Independent scrutiny of a target's financials before investment.
View service →Care Home Finance
NHS fee negotiation, aged debt recovery and financial health checks for care home operators.
View service →Fractional CFO for Care Homes
Senior finance leadership for care home operators without a full-time hire.
View service →How Is Care Home EBITDA Calculated for Acquisition Finance?
Normalising reported earnings into the EBITDA a lender or buyer will use, with a worked example.
How Does CQC Rating Affect Care Home Valuation and Finance?
How each CQC rating affects valuation multiples, lender appetite and private pay occupancy.
What Financial KPIs Should a Care Home Operator Track?
The six core KPIs, how each is calculated, and what lenders expect to see.
Whether it's tax, CFO
or strategic finance.
Whether you are seeking tax optimisation, CFO advisory or strategic finance support, we respond promptly and work with precision. No junior gatekeepers. You speak directly to Bharat Varsani FCCA.
19-21 Westfield Lane
Harrow, London HA3 9ED