Selling your outpatient physical therapy practice is a major decision. In New Hampshire, the market is shaped by strong growth projections and increasing consolidation. This creates a unique window of opportunity for owners who are prepared. Navigating this landscape requires understanding your practice’s true value, the types of buyers in the market, and how to structure a deal that protects your financial future and legacy.
Curious about what your practice might be worth in today’s market?
This article provides a brief overview of the key factors for practice owners in the Granite State to consider. We will cover the market climate, how to prepare for a sale, and what to expect after the transaction closes. Making an informed choice starts with having the right information.
Market Overview
The outlook for physical therapy in New Hampshire is strong. Favorable market conditions and demographic trends create a positive environment for practice owners considering a sale. This is not just a feeling. The data points to real opportunity for those who know how to position their practice correctly.
Here are a few key indicators of the market’s strength:
- Projected Industry Growth. The states physical therapy industry is on track to reach nearly $200 million by 2025. This growth signals a healthy and expanding market for services.
- High Demand for Talent. Employment for physical therapists in New Hampshire is expected to grow by 18% through 2032. This reflects a sustained need for care.
- Favorable State Laws. New Hampshire allows for direct access to physical therapy. This means patients can seek treatment without a physician referral, which can create a more reliable and independent stream of patients for your practice.
Key Considerations
A strong market is a great starting point. Your practice’s specific attributes, however, are what will ultimately determine its attractiveness to a buyer. A potential acquirer will look closely at the stability of your revenue and the diversity of your referral sources. Having a healthy mix of payers, including Medicare and various private insurers, reduces risk. They will also look at how dependent the practice is on you as the owner. Building a practice that can thrive without your daily presence is a key step in making it a valuable, sellable asset. Thinking about these factors is the first step in strategic positioning for a successful sale.
Market Activity
The national trend of consolidation is very active in the physical therapy space, and New Hampshire is no exception. This activity is a primary driver of practice sales today.
The Rise of Consolidation
Larger healthcare organizations and private equity-backed groups are actively acquiring smaller, independent practices. They do this to achieve economies of scale, expand their geographic footprint, and lower costs. In recent years, industry reports show the percentage of practices with over $5 million in annual revenue has more than doubled. This shows a clear shift toward larger, more structured organizations.
What This Means for You
This trend can be seen as either a threat or an opportunity. For some, the increased competition from larger players is a reason to consider selling. For others, it creates a robust market of well-capitalized buyers who are willing to pay a premium for a well-run practice. It means you are not just selling to another local therapist. You may be negotiating with a sophisticated corporate buyer, which changes the entire dynamic of the sale.
The Sale Process
Selling your practice follows a clear, structured path. It begins long before your practice is ever listed. The first phase is preparation, where you organize your financial records and operational documents to present a clean and compelling story to buyers. Next comes a formal valuation to establish a credible asking price. Once a price is set, the process moves to confidential marketing, where potential buyers are identified and vetted. From there, you will navigate letters of intent, a deep-dive due diligence period where the buyer verifies everything, and finally, the legal closing. Many deals encounter unexpected challenges during due diligence, which is why proper preparation is so important.
Valuation
Determining what your physical therapy practice is worth is more than just looking at your annual revenue. Sophisticated buyers value your practice based on its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents the true cash flow of your business, normalized for any owner-specific or one-time expenses. That Adjusted EBITDA is then multiplied by a specific number, or “multiple,” which varies based on your practice’s size, growth, and risk factors. Getting this right is the foundation of a successful sale.
| Common Mistake | The SovDoc Approach |
|---|---|
| Using “rule of thumb” revenue guesses. | We use a precise Adjusted EBITDA calculation based on your financials. |
| Ignoring owner-related expenses. | We identify and add back personal or one-time costs to show true profitability. |
| Presenting messy financial records. | We help you prepare clean, buyer-ready financials before going to market. |
| Having a single offer define your value. | We create a competitive process to ensure the market determines the highest value. |
Post-Sale Considerations
The sale of your practice does not end when you receive the funds. The decisions you make during negotiations will shape your life for years to come. It is important to plan for this next chapter with the same diligence you applied to building your practice.
Before you finalize any deal, you should have clear answers to a few key questions:
- What will my role be? Will you retire completely, stay on to practice for a set period, or take on a leadership role in the new, larger organization?
- How is my team protected? What assurances can you secure for your dedicated staff regarding their future employment and roles?
- What are the financial structures? A portion of the sale might include an “earnout” based on future performance or “rollover equity,” where you retain ownership in the new company. You need to understand the implications of these structures.
- What are my restrictions? Non-compete agreements are standard. You must be clear on what they permit you to do professionally after the sale.
Thinking through these points ensures your transition out of ownership aligns with your personal, financial, and professional goals.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What is the current market outlook for selling an outpatient physical therapy practice in New Hampshire?
The market outlook is strong with the industry projected to reach nearly $200 million by 2025. High demand for physical therapist talent and favorable state laws allowing direct access to therapy without physician referrals contribute to a positive selling environment.
What factors do buyers consider when evaluating a physical therapy practice for sale in New Hampshire?
Buyers look at revenue stability, diversity of referral sources, and payer mix (including Medicare and private insurers). They also assess how dependent the practice is on the owner, preferring practices that can operate independently of the owner’s daily involvement.
How does consolidation impact the sale of physical therapy practices in New Hampshire?
There is active consolidation with larger healthcare organizations and private equity groups acquiring smaller practices. This trend creates a market with sophisticated buyers willing to pay a premium for well-run, client-stable practices, changing negotiation dynamics.
What is the typical sale process for an outpatient physical therapy practice?
The sale process includes preparation of financial and operational documents, formal valuation, confidential marketing to prospective buyers, negotiation of letters of intent, due diligence by buyers, and legal closing. Preparation is critical to manage challenges during due diligence.
What post-sale considerations should owners keep in mind after selling their practice?
Owners should consider their post-sale role (retiring, staying on, or leadership), protection for their team, financial deal structures such as earnouts or rollover equity, and any restrictions like non-compete agreements that affect their professional future.