Guide to Selling a Fertility & IVF Practice in California

Selling a Fertility & IVF practice in California presents a unique and timely opportunity. The market is shaped by new legislation and high investor demand, creating a favorable environment for practice owners. If you are considering your future, understanding these dynamics is the first step toward a successful transition. This guide provides key insights into the valuation, timing, and process of selling your practice in today’s active market.

Market Overview

The market for fertility services is experiencing remarkable growth. This trend is especially pronounced in California, creating a strong environment for practice owners considering a sale. Understanding the key drivers is a good first step.

National Growth and Demand

The U.S. IVF market was valued at over $5.2 billion in 2023 and continues to expand. With nearly 2% of all infants in the country conceived using Assisted Reproductive Technology (ART), the demand for high-quality fertility care is consistent and growing. This national trend provides a stable foundation for practice valuations.

California s Leading Role

California stands out as a central hub for fertility treatment. The state saw over 11,000 babies born via ART in a single recent year, demonstrating a robust and established patient base. This high volume makes California practices particularly attractive to buyers seeking to enter or expand in a proven market.

The SB 729 Impact

The upcoming insurance mandate, SB 729, is set to reshape the landscape. Starting in 2026, most group insurance plans must cover fertility treatments, including IVF. This will dramatically increase patient access and fuel demand. For practice owners, this legislative tailwind can significantly enhance future revenue projections and, in turn, current practice value.

Key Considerations

A strong market is only one part of the equation. Sophisticated buyers, especially private equity firms, look deep into a practice s operations before making an offer. Preparing for this scrutiny is important. They will focus on a few key areas.

Your financial health is front and center. Buyers want to see clean financial records and healthy profit margins, which can reach 20-25% in well-run IVF clinics. They will analyze everything from your billing processes to your cost management.

Next, expect a deep dive into your regulatory and ethical standing. This means confirming strict adherence to HIPAA for patient privacy and FDA regulations for lab and tissue handling. Demonstrating a clear commitment to ethical practices is not just good medicine. It is a critical factor in de-risking the transaction for a buyer.

Finally, your clinical reputation and outcomes matter. Your IVF success rates are a powerful indicator of quality and a key driver of your brand’s value.

Market Activity

The interest in California fertility practices is not just theoretical. It is translating into a very active M&A market. This activity is driven by several key trends that create significant opportunities for practice owners who are prepared.

1. High Private Equity Interest. Private equity (PE) firms see the strong margins and growth potential in fertility. They are actively seeking to invest, which drives competition and increases valuations. In one recent year, at least 25 fertility clinics were acquired by PE-backed groups and other large companies.

2. Competition from Strategic Buyers. It is not just financial investors. Larger, established healthcare organizations and digital health companies are also acquiring practices. They are looking to expand their footprint in the lucrative California market.

3. The Drive for Scale. Many buyers are pursuing a “platform” strategy. They acquire a strong anchor practice and then grow by adding smaller clinics. If your practice is well-managed and has a solid reputation, it could be a highly sought-after platform asset. This competitive tension is a powerful advantage for sellers.

Sale Process

Selling your practice is a structured process, not a single event. While every transaction is unique, the journey generally follows a clear path. Understanding these stages can help you prepare for what lies ahead.

It begins with Preparation. This involves organizing your financial statements, reviewing contracts, and assembling key operational data. This is also when we help owners frame the story of their practice to highlight its strengths.

Next comes Valuation to establish a clear, data-backed understanding of what your practice is worth. From there, we move to confidentially Marketing the practice to a curated list of qualified buyers.

This leads to receiving offers and Negotiation. Once an offer is accepted, the most intensive phase begins: Due Diligence. This is where the buyer verifies all financial, legal, and operational information. Proper preparation early on prevents surprises here. The final stage is Closing, where legal documents are signed and the transition of ownership is finalized.

Valuation

Determining your practice’s value is more than a simple calculation. Buyers in the fertility space use a specific methodology based on your actual cash flow, not just your reported profit.

The key metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). We calculate this by taking your net income and adding back non-cash expenses and any owner-related perks that won’t continue after the sale, like a luxury car lease or above-market salary. This gives a true picture of the practice’s profitability.

This Adjusted EBITDA figure is then multiplied by a number called a multiple. This multiple is not fixed. It changes based on several factors, with higher quality practices commanding higher multiples.

Getting this valuation right is the foundation of a successful sale strategy.

Post-Sale Considerations

The transaction is not the end of the story. A successful transition plan considers what happens the day after the deal closes. Thinking about this early gives you more control over the outcome. There are a few key areas to consider for your future.

First is your future role. Many buyers want the founding physicians to stay on for a period to ensure a smooth transition. The terms of this continued employment, from your clinical autonomy to your compensation, are a critical part of the negotiation.

Second is the financial structure. A sale often includes more than just cash at closing. You may be offered an “earnout,” which provides additional payments for hitting future performance targets. Or you might “roll over” 10-30% of your equity into the new, larger company, giving you a second financial opportunity when that company is sold again.

Finally, we work with you to plan for your legacy and your team. The right partner will share your commitment to patient care and want to retain your talented staff. Protecting the culture you built is an important goal for many of our clients.