Selling your telehealth or digital therapy practice in Indianapolis means tapping into a rapidly expanding market. The global telehealth market is seeing explosive growth, with a projected 24% annual growth rate through 2030. For practice owners like you, this creates a significant opportunity. But realizing your practice’s full value requires understanding the market, preparing for the process, and knowing what buyers are looking for. This guide provides the key insights you need to navigate your sale successfully.
Market Overview
The current market for telehealth and digital therapy practices is incredibly strong, both globally and for providers serving the Indianapolis area. This is not a fleeting trend. It is a fundamental shift in how healthcare is delivered. This momentum creates a seller’s market, but you need to understand the forces at play.
Here is what is driving the opportunity:
1. Massive Physician Adoption. The number of physicians using telehealth for patient care skyrocketed from 15% in 2019 to over 86% in 2021. This widespread acceptance means buyers see telehealth as a stable, integrated part of medicine, not a niche service.
2. Surging Digital Therapy Demand. The online therapy market is projected to nearly quadruple by 2034. This specialized growth makes digital therapy practices in markets like Indianapolis particularly attractive to acquirers looking for proven models.
3. Strong Investor Interest. The overall digital health market is attracting significant investment, with buyers looking for established, well-run practices to build upon.
Key Considerations for Indianapolis Sellers
A strong market is a great starting point. Your success, however, depends on managing factors specific to your telehealth practice in Indiana. Buyers will scrutinize your operations, so it is important to have your house in order. Getting these details right before a sale can significantly impact your final valuation.
Regulatory Compliance
Navigating telehealth regulations is a major hurdle. You must demonstrate strict adherence to both federal rules and Indiana-specific laws, such as the prescribing requirements outlined in Indiana Code a7 25-1-9.5. Buyers look for clean compliance records. Any uncertainty here can stall a deal or lower the price.
Technology and Scalability
Your technology platform is a core asset. Is it proprietary or off-the-shelf? Is it scalable? Can it be easily integrated into a larger organization? A buyer is not just acquiring your patient list. They are acquiring your service delivery model, and the technology must be sound.
Payer Contracts and Revenue Mix
Who pays for your services? A healthy mix of commercial insurance, Medicare, and private pay is often ideal. Buyers will analyze your payer contracts and reimbursement rates to assess financial stability. Practices overly reliant on a single payer can be seen as higher risk.
Market Activity
The demand for telehealth practices has created a very active M&A market. Strategic acquirers and private equity (PE) firms are competing for established platforms, especially in growing behavioral health markets like Indianapolis. This competition can drive up valuations for well-prepared practices.
However, not all buyers are created equal. Some are looking to absorb your practice into a massive, impersonal network. Others are looking for true partners who can help lead regional growth. Finding the right fit is critical. An offer might look good on paper, but the wrong partner can compromise your legacy and your team’s future.
This is why a structured, confidential process is so important. Instead of just taking the first offer that comes along, we believe in creating a competitive environment. This brings multiple qualified buyers to the table, giving you the power to choose a partner who not only offers the best price but also aligns with your vision for the future of the practice.
The Sale Process at a Glance
Selling your practice follows a structured path. While it can seem complex, understanding the basic stages helps you prepare for what is ahead. Many owners think about selling for years. We find that starting the preparation process early is the single best way to maximize value and ensure a smooth transition. Rushing the process often leads to mistakes.
The journey typically looks like this:
| Stage | What It Involves | Where Owners Face Challenges |
|---|---|---|
| Preparation & Valuation | Cleaning up financials, organizing documents, and getting a clear, data-driven valuation. | Using inaccurate “rules of thumb” or having messy financial records. |
| Marketing | Confidentially identifying and approaching a curated list of qualified strategic and financial buyers. | Talking to only one buyer or breaking confidentiality by marketing too broadly. |
| Due Diligence | The buyer thoroughly inspects your finances, operations, and legal compliance. | Being unprepared for the sheer volume of data requests, leading to delays and doubt. |
| Closing | Finalizing the legal agreements and transitioning ownership of the practice. | Navigating complex legal terms and post-sale agreements like earnouts. |
How Your Practice is Valued
The most common question we hear from owners is, “What is my practice actually worth?” The answer isn’t based on revenue or what you paid for your equipment. Sophisticated buyers value your practice based on its consistent, repeatable cash flow.
The key metric they use is Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. More importantly, it is “adjusted” to remove any one-time expenses or personal owner benefits run through the company. This gives a true picture of the practice’s profitability. That Adjusted EBITDA figure is then multiplied by a number called a “multiple.” While a typical practice might see a multiple of 3x to 6x, a scalable telehealth practice with a strong growth profile can command a higher one.
Your multiple depends on factors like your provider model, payer mix, and growth potential. Getting this calculation right is the foundation of a successful sale. Most owners are surprised to learn their practice is worth more than they thought once their financials are properly prepared for a buyer’s review.
Planning for Life After the Sale
The day you sign the closing documents is not the end of the story. It is the beginning of a new chapter for you and your practice. A successful transition requires planning for what comes next. Neglecting this phase can lead to leaving money on the table or an unhappy transition for your team.
Here are a few things to consider well before the sale:
1. Your Future Role. Do you want to continue working in the practice? For how long? Your role can be a key point of negotiation. Many deals include a 1-3 year transition period.
2. Structuring for a Second Payout. Many modern deals include an earnout (extra payments for hitting performance targets) or rollover equity (keeping a stake in the new, larger company). This gives you a chance for a “second bite of the apple” when the new company is sold again.
3. Protecting Your Team. The future of your staff is a major concern for most owners. The right buyer will see your team as a valuable asset to be retained and developed, not a cost to be cut. This should be a key part of your buyer selection criteria.
4. Managing Your Proceeds. You have worked hard for this. Structuring the sale to be as tax-efficient as possible and having a plan for your financial future is a critical step that requires advance planning.
Frequently Asked Questions
What is driving the strong market for selling telehealth and digital therapy practices in Indianapolis?
The telehealth market is experiencing rapid growth globally and locally in Indianapolis, driven by massive physician adoption, surging demand for digital therapy, and strong investor interest. This creates a seller’s market with significant buyer demand.
What are the key regulatory considerations when selling a telehealth practice in Indiana?
Sellers must demonstrate strict adherence to federal telehealth regulations and Indiana-specific laws, including prescribing requirements outlined in Indiana Code § 25-1-9.5. Buyers expect clean compliance records to avoid deal delays or price reductions.
How is a telehealth or digital therapy practice typically valued during a sale?
Practices are commonly valued based on Adjusted EBITDA, which represents earnings before interest, taxes, depreciation, and amortization, adjusted for one-time expenses and personal owner benefits. This figure is multiplied by a market multiple (often between 3x to 6x) reflecting the practice’s growth potential and other factors.
What should a seller know about the sale process for their telehealth or digital therapy practice?
The sale process includes preparation and valuation, marketing to qualified buyers, due diligence, and closing. Starting preparation early and maintaining confidentiality during marketing are critical to maximizing value and ensuring a smooth transaction.
How can a seller plan for life after selling their telehealth or digital therapy practice?
Sellers should consider their future role in the practice, such as transition periods of 1-3 years, structures for second payouts like earnouts or rollover equity, protection and retention of their team, and strategies for managing proceeds tax-efficiently.