Thinking about buying or selling an NDIS business? Here’s what matters

NDIS providers are increasingly looking at mergers, sales, and acquisitions — but these deals aren’t simple.

Getting the structure, customer transition, workforce issues, and NDIS Commission expectations right makes all the difference once the dust settles.

NDIS deals can be made to move quickly, but skipping steps often stores up problems for later. Issues rarely surface neatly at completion. More often, they emerge down the track as payments are reconciled, service gaps appear, and staff or participants walk. If the deal has been priced and structured for those risks, that’s manageable. If it hasn’t, surprises can get expensive.

The first decision? Structure.

• Share sale: Makes sense if you know the business well and are comfortable with hidden risks.
• Asset sale: Usually safer but sometimes more costly to negotiate and messier in practice.
• NFP deals: Plenty of ways to structure beyond formal statutory mergers. One size does not fit all.

Structure will usually end up reflecting the drivers for the transaction: time, tax implications, cost, risk appetite, bargaining power etc — and sometimes, what market optics demand.

Start with a term sheet.

In NFP deals especially, an initial term sheet:

• Tests whether there’s a real deal;
• Gives the board some governance around negotiations; and
• Locks down confidentiality and exclusivity to allow space for proper due diligence and sensible discussion.

Warranties and Indemnities — Only useful if you can collect.

If the seller will be stripped of assets or wound up after Completion, warranties and indemnities may be worthless. Buyers need strong escrow or holdback mechanisms if they want real recourse.

Participants — and informed consent.

NDIS participants aren’t automatically transferred in an asset sale. They must actively agree to move — and even in a share sale, they can choose to leave at any time.

Buyers need a realistic view of how “sticky” participants will be, and how to manage leakage risk during and after transition. Various contractual mechanisms can be employed here.

The NDIS Commission will also be watching carefully to make sure participants are genuinely given choice and control, and that transfers comply with the NDIS Code of Conduct and Practice Standards.

Staff liabilities — a real risk.

Large workforces come with serious payroll risks:

• Accrued leave, long service, and underpayment issues must be properly factored in; and
• Awards and EBAs need close review — assumptions here can become expensive mistakes later.

Timing matters.

Deals completing in late 2025 will coincide with the rollout of Navigators and major funding reforms under the NDIS Review. These changes won’t stop deals — but they mean transition planning and pricing assumptions must be stress-tested carefully.

And, finally — transition planning.

The NDIS Commission, participants, and staff will expect to see credible plans for service continuity, workforce management and compliance. A business with a strong transition plan will always have a better chance of holding value after the ink dries.

Lavan advises NDIS providers on buying, selling, and structuring transactions that work commercially — and stand up under regulatory scrutiny.

For advice, contact Amber Crosthwaite at 9288 6931 or amber.crosthwaite@lavan.com.au.

Disclaimer

The information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.