Guide to Selling a Ortho & MSK Practice in Cleveland, OH

Understanding the Market, Your Valuation, and the Path to a Successful Transition

The market for Ortho & MSK practices is experiencing significant consolidation, and the Cleveland healthcare landscape is no exception. For practice owners, this presents a unique window of opportunity. Selling your practice is a major decision that involves far more than a simple handshake. This guide offers insights into the current market, how to understand your practice’s true value, and the key steps in planning a successful and rewarding transition.

Market Overview

You are likely seeing the trends in medical journals and hearing about them from colleagues. Healthcare is consolidating. Nationally, the acquisition of orthopedic practices is on the rise, driven by large health systems and, increasingly, private equity groups. This creates a dynamic and competitive environment for practice owners looking to sell.

The Cleveland Healthcare Landscape

Here in Cleveland, with its world-class hospital systems and robust medical community, these national trends have a distinct local flavor. Buyers are actively seeking well-run Ortho & MSK practices to build their platforms. While detailed public data on local transactions is scarce, the underlying activity is strong. Understanding who the buyers are and what they are looking for in the Cleveland market is a key first step.

Key Considerations

A successful sale goes beyond securing the highest price. It’s about achieving your personal and professional goals. We find that owners often worry about losing control or seeing their practice culture change. These are valid concerns. The key is finding a partner who aligns with your vision.

Before you begin, consider these three points:

1. What is your vision for your legacy? Do you want to ensure your staff is taken care of and your patient care philosophy continues? The structure of the deal can and should protect these elements.
2. What role do you want to play after the sale? Many owners continue to practice with reduced administrative burdens. A good partnership keeps you at the clinical helm while providing the back-office support you need.
3. Are you looking for a partner or just a buyer? The right partner brings resources that can help the practice grow, improve technology, and strengthen its negotiating power with payors, benefiting you even if you retain equity.

Market Activity

The conversations around practice acquisitions are supported by clear market data. While past performance is not a guarantee of future results, recent trends show a sustained, high level of interest from buyers across physician specialties, including Ortho & MSK.

This activity indicates a seller’s market, but one that requires careful navigation to connect with the right buyers.

The Sale Process

Many physicians believe the sale process begins when they receive an offer. In reality, the most successful transactions begin one to two years before that. Buyers pay for proven performance, not just potential. Preparing your practice in advance allows you to sell on your terms.

The process generally follows five main stages:

1. Preparation and Strategy: We help you clean up financials, define your personal goals, and develop a strategic narrative for buyers.
2. Valuation: A comprehensive analysis is performed to determine a realistic and defensible value range for your practice.
3. Confidential Marketing: We identify and discreetly approach a curated list of qualified buyers who are the best strategic and cultural fit.
4. Negotiation and Due Diligence: We manage negotiations to create competitive tension. Then, we help you prepare for the buyer’s deep dive into your operations, a stage where many deals falter without proper guidance.
5. Closing and Transition: We work with legal counsel to finalize agreements and ensure a smooth handover that protects you, your staff, and your legacy.

Valuation

Understanding what your practice is worth is the cornerstone of any sale strategy. While you may hear about general “rules of thumb,” a true valuation is far more nuanced. Sophisticated buyers don’t look at your reported net income. they look at your Adjusted EBITDA.

Beyond the Balance Sheet

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is the key metric. It starts with your profit and then adds back owner-specific expenses like an above-market salary, personal vehicle leases, or other non-operational costs. This reveals the true cash flow of the business, which is what a buyer is purchasing. We often find that a practices value is significantly higher than the owner initially believed once these adjustments are made.

What Drives Your Multiple Higher?

That Adjusted EBITDA figure is then multiplied by a number (the “multiple”) to reach your practice’s enterprise value. For Ortho & MSK practices, this can range from 3x to well over 7x. Factors that push your multiple higher include having multiple providers, a strong referral network, diverse payer contracts, and ancillary service lines.

Post-Sale Considerations

The transaction closing is not the end of the journey. The decisions you make during the sale process will shape your financial future and professional life for years to come. A well-structured deal considers what happens the day after the papers are signed.

Planning Your Next Chapter should include:

• Tax Strategy: The structure of your sale has major implications for your after-tax proceeds. Planning this in advance, not at the closing table, is critical.
• Your Future Role: A clear and detailed employment agreement defines your compensation, responsibilities, and schedule, giving you clarity and security.
• Wealth Management: You are transitioning from owning a business to managing a significant liquid asset. This requires a different financial skillset and a solid plan.
• Handling Rollover and Earnouts: Many modern deals include seller-retained equity (“rollover”) or performance-based payments (“earnouts”). Understanding how to maximize the value of these components is part of a complete exit strategy.