The market for Occupational Therapy practices in North Carolina is strong, driven by significant industry growth. For practice owners, this presents a unique window of opportunity. Selling a practice is more than a transaction. It is a major financial and personal milestone. Successfully navigating the sale requires careful preparation and a clear understanding of your practice’s value and the current market landscape. This guide provides the insights you need to start the process.
Market Overview
The timing for selling an Occupational Therapy practice has rarely been better. The market is supported by powerful tailwinds, making well-run practices in North Carolina highly attractive to a range of buyers.
National Industry Growth
The entire therapy sector is expanding rapidly. Projections show the US occupational and physical therapy market growing at over 10% annually. This national trend attracts sophisticated buyers, including private equity groups and large strategic health systems. They are actively seeking to invest in stable, profitable practices. They do not pay for potential. They pay for what is already proven and well-documented.
North Carolina’s Favorable Landscape
North Carolina is a particularly appealing location. The state’s demographics and robust healthcare ecosystem create consistent demand for OT services. Buyers recognize this and are often willing to pay a premium for practices with a strong local reputation and established referral networks within the state.
Key Considerations
A strong market is a great start, but a buyer’s decision comes down to the details of your specific practice. Before you begin the sale process, you should assess the key drivers of value. Buyers will look closely at the experience and stability of your clinical staff. They will also analyze your payer mix to understand revenue stability. Strong referral relationships with local physicians are a major asset. Finally, documented compliance with North Carolina’s Occupational Therapy Practice Act (Chapter 90, Article 18D) and all federal regulations is not negotiable. Organizing these elements beforehand is critical. It can significantly impact your final valuation and the smoothness of the transaction.
Market Activity
The market in North Carolina is not just growing; it is active. We are seeing a clear trend of smaller, independent practices being acquired by larger organizations. This activity tells us a few important things about the current environment.
- Strategic Buyers Are Present. Large regional and national therapy groups are looking to expand their footprint in North Carolina. Transactions like OrthoCarolina’s sale of its PT division to PT Solutions show that even established players are making strategic moves.
- Private Equity is Investing. PE firms view therapy services as a stable, high-growth investment. They bring capital and operational expertise, but they also have very specific criteria and conduct intense due diligence.
- A Competitive Process Yields Results. With multiple types of buyers in the market, you have the ability to create competition for your practice. Running a structured sale process ensures you connect with the right buyer, not just the first one, maximizing both price and terms.
The Sale Process
Selling your practice is a structured journey. While every sale is unique, the process generally follows a clear path from preparation to closing. Understanding these stages helps you plan accordingly and avoid common pitfalls, especially during the intense due diligence phase where many deals can stumble. A well-managed process protects your interests and keeps the momentum moving toward a successful closing.
| Sale Stage | Key Objective |
|---|---|
| 1. Valuation & Strategy | Establish a clear, defensible valuation and define your personal and financial goals for the sale. |
| 2. Preparation | Organize financial records, operational data, and legal documents into a secure data room for buyer review. |
| 3. Confidential Marketing | Anonymously market the opportunity to a curated list of qualified strategic and financial buyers. |
| 4. Due Diligence | The chosen buyer conducts a deep dive into your practice’s financials, operations, and compliance. |
| 5. Closing | Finalize legal agreements, transition ownership, and receive proceeds from the sale. |
Understanding Your Practice’s Value
Many practice owners mistakenly believe their practice’s value is a simple multiple of revenue. Sophisticated buyers, however, look at value through a different lens. They focus on profitability and risk.
Beyond the Profit & Loss Statement
The most important metric in a practice sale is Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. We start with your net income and then “adjust” it. We add back owner-specific expenses like a car lease or personal travel, and we normalize the owner’s salary to a fair market rate. The result is a true picture of the practice’s profitability, which is often much higher than you think.
What Determines Your Multiple?
This Adjusted EBITDA figure is then multiplied by a number (the “multiple”) to arrive at your practice’s base valuation. That multiple is not fixed. It changes based on several factors, including your payer mix, your reliance on a single provider, your history of growth, and the quality of your operational systems. A multi-provider practice with strong growth commands a much higher multiple than a solo practice that has been flat for years.
Post-Sale Considerations
The day you sign the closing documents is not the end of the journey. A successful transition requires a clear plan for what comes next. You and the buyer will agree on a transition period where you will help ensure a smooth handoff of patient care and administrative duties. Protecting your staff and ensuring their continuity is a key part of preserving the legacy you have built. Furthermore, the structure of your deal has major long-term financial implications. You may retain equity in the new, larger company through a “rollover,” giving you a second potential payday. You may also have an “earnout” based on future performance. Planning for these elements and their tax consequences is a critical final step in the process.
Frequently Asked Questions
What factors make North Carolina an attractive location for selling an Occupational Therapy practice?
North Carolina is appealing due to its favorable demographics and a robust healthcare ecosystem that creates consistent demand for OT services. Buyers are willing to pay a premium for practices with a strong local reputation and established referral networks within the state.
How is the value of an Occupational Therapy practice determined in North Carolina?
The value is primarily based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which adjusts net income by adding back owner-specific expenses and normalizing salary. This figure is then multiplied by a valuation multiple, which varies based on factors like payer mix, provider reliance, growth history, and operation quality.
What are the key stages in the sale process of an Occupational Therapy practice?
The sale process typically involves these stages: 1) Valuation & Strategy, 2) Preparation with organized financial and legal documents, 3) Confidential Marketing to qualified buyers, 4) Due Diligence by the buyer, and 5) Closing with final agreements and ownership transfer.
Who are the typical buyers interested in Occupational Therapy practices in North Carolina?
Buyers include sophisticated strategic buyers such as regional and national therapy groups expanding their footprint, and private equity firms that view therapy services as stable, high-growth investments. These buyers are looking for practices with proven profitability and documented operational systems.
What post-sale considerations should sellers of Occupational Therapy practices in North Carolina keep in mind?
Sellers should plan for a transition period to ensure smooth handoff of patient care and administrative duties. Protecting staff continuity and the practice legacy is important. Financially, sellers may retain equity through a rollover or have an earnout based on future performance, both of which have tax implications to consider.