Selling your Occupational and Hand Therapy practice is one of the most significant financial and professional decisions you will ever make. For practice owners in Delaware, the current market presents a unique set of opportunities and challenges. Navigating this landscape requires a clear understanding of your practice’s value, the types of buyers looking to acquire, and the steps needed to achieve a successful exit. This guide provides insights to help you prepare for the journey ahead.
Curious about what your practice might be worth in today’s market?
Market Overview
The demand for therapy services is strong. This creates a favorable environment for practice owners considering a sale. Nationally, the field is projected to grow significantly, and Delaware’s market reflects this positive trend.
A Growing Field
The U.S. Bureau of Labor Statistics projects a 14% growth in employment for therapists between 2023 and 2033. This indicates a sustained and rising need for the specialized services your practice provides. Buyers, both strategic and financial, are actively seeking to invest in this growth sector, and they see established practices as a prime entry point.
The Delaware Landscape
Delaware has a focused community of approximately 420 occupational therapists. This creates a market that is both competitive and well-connected. Practices in the U.S. report average annual receipts of around $871,000 with healthy net profit margins between 14-20%. For a well run practice in Delaware, these figures represent a strong baseline and highlight the potential that buyers are looking for.
Key Considerations
When you decide to sell, a buyer is not just acquiring your equipment and your lease. They are buying your cash flow, your reputation, and your future growth potential. Preparing your practice means looking at your business through a buyer’s eyes. They will focus on consistent profitability and strong referral networks from local physicians and health systems. Your skilled team, especially those with advanced credentials like a Certified Hand Therapist (CHT) designation, is a major asset that adds significant value. It is also important that your practice is fully compliant with the Delaware Board of Occupational Therapy Practice regulations under 24 Del. C., Chapter 20. Proving this compliance upfront smooths the entire process.
Market Activity
The therapy sector is a hub of M&A activity, with different types of buyers pursuing practices for different reasons. Understanding who they are can help you position your practice effectively.
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Strategic Buyers Are Acquiring. Large regional and national therapy groups like Ivy Rehab are constantly looking to expand their geographic footprint. For them, acquiring a practice like yours is faster and more effective than building a new clinic from scratch. They are buying your established patient flow and community presence.
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Private Equity is Entering the Space. Financial buyers are also active. They often look for successful practices to use as a “platform” for future growth and acquisitions in the region. They bring capital and operational expertise, and a partnership with them can often involve you staying on in a leadership role.
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Local Competitors Seek Growth. Sometimes the right buyer is a successful practice right down the road. They may be looking to expand into a new specialty like hand therapy or simply grow their market share. These buyers understand the local dynamics, which can be an advantage.
The Sale Process
The journey from decision to closing typically follows a few key phases. It starts long before your practice is ever shown to a potential buyer. The first step is preparation, which involves gathering at least three years of financial records, tax returns, and operational data. We find that owners who prepare this information in advance have a much smoother process. Next, a confidential marketing process begins. Your advisor will approach a curated list of qualified buyers who have all signed a Non-Disclosure Agreement. This protects your staff, patients, and reputation. Once interest is generated, the due diligence phase begins. This is where a buyer verifies all the information about your practice. It is the most intensive part of the process, but good preparation makes it manageable.
The due diligence process is where many practice sales encounter unexpected challenges.
Valuation: What is Your Practice Really Worth?
Many owners think of their practice’s value as a simple multiple of revenue. While industry benchmarks suggest therapy practices sell for 0.5x to 2.5x annual revenue, sophisticated buyers look deeper. They value your practice based on a metric called Adjusted EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This figure represents the true cash flow of the business, adjusted for any owner-specific or one-time expenses.
This Adjusted EBITDA is then multiplied by a number that reflects your practice’s quality and risk profile. The higher the quality of your practice, the higher the multiple a buyer is willing to pay. Several factors influence this multiple.
| Factor | Impact on Valuation Multiple |
|---|---|
| Strong Referral Base | Positive |
| Reliance on a Single Owner | Negative |
| Staff includes Certified Hand Therapists (CHTs) | Positive |
| Diverse Insurance & Payor Mix | Positive |
| Documented Growth Plan | Positive |
An accurate valuation is the foundation of a successful sale. It ensures you don’t leave money on the table.
Post-Sale Considerations
The day you sign the papers is a beginning, not just an end. It is important to plan for what comes next. The structure of your sale has major implications for your after-tax proceeds. A deal can be structured in different ways to optimize your financial outcome, and this planning needs to happen before the deal is finalized. You also need to consider your future role. Many buyers will want you to stay on for a transition period to ensure a smooth handover of patient and referral relationships. For those not ready to retire, some deals, particularly with private equity, involve rolling a portion of your sale proceeds into equity in the new, larger company. This creates the potential for a second, future payout. Finally, a successful transition protects your legacy and the team you built. Finding a buyer whose culture aligns with your own is key to ensuring your staff are in good hands.
Your specific goals and timeline should drive your practice transition strategy.
Frequently Asked Questions
What is the current market trend for Occupational and Hand Therapy practices in Delaware?
The market for Occupational and Hand Therapy practices in Delaware is currently favorable for sellers due to strong demand for therapy services and positive growth projections. The U.S. Bureau of Labor Statistics projects a 14% employment growth for therapists between 2023 and 2033, and Delaware has a competitive yet well-connected community of approximately 420 occupational therapists.
What factors influence the valuation of an Occupational and Hand Therapy practice in Delaware?
Valuation is based on Adjusted EBITDA multiplied by a multiple reflecting the practice’s quality and risk profile. Key factors influencing the multiple include a strong referral base, presence of Certified Hand Therapists (CHTs), diverse insurance and payor mix, documented growth plans, and reliance on the owner (which negatively impacts valuation).
Who are the typical buyers interested in acquiring an Occupational and Hand Therapy practice in Delaware?
Typical buyers include strategic buyers such as large regional and national therapy groups expanding their footprint, private equity firms seeking platforms for growth and acquisitions, and local competitors aiming to grow market share or enter new specialties like hand therapy.
What preparation is needed before selling a Occupational and Hand Therapy practice in Delaware?
Preparation involves gathering at least three years of financial records, tax returns, and operational data. Ensuring compliance with Delaware Board of Occupational Therapy Practice regulations, having a skilled team, strong referral networks, and consistent profitability also add value and smooth the sales process.
What should I consider after selling my Occupational and Hand Therapy practice?
Post-sale considerations include planning for tax implications based on the deal structure, deciding on your future role (such as staying on for a transition period), potential equity participation in a larger company if selling to private equity, and ensuring the buyer’s culture aligns with yours to protect your staff and legacy.