Guide to Selling a Orthopedic & Post-Surgical Rehab Practice in San Diego, CA

The San Diego market for orthopedic and post-surgical rehab practices is more active than ever. This creates a significant opportunity for practice owners like you who are considering an exit. This guide provides a clear overview of the current market landscape, key valuation drivers, and the strategic steps involved in a successful sale. Understanding these elements is the first step toward realizing your practice’s full potential and securing your financial future.

Market Overview

You are part of a growing, multi-billion dollar industry. Nationally, the physical therapy market is valued at over $47 billion and is projected to grow steadily. This growth is attracting significant attention from investors, which has a direct impact on you as a practice owner in a competitive area like San Diego.

National Strength and Local Competition

The strong national outlook makes well-run practices attractive acquisition targets. In San Diego, this translates into a very active market. While this means there are buyers, it also means there is more competition among sellers. Standing out requires a clear strategy and a practice that is professionally prepared for sale. Your strong reputation in the community is a great start, but buyers will look much deeper.

The Rise of Consolidation

The biggest trend you need to be aware of is consolidation. Larger regional and national companies, including those backed by private equity, are actively acquiring independent practices to build scale. For you, this means the potential for a premium valuation. It also means you will be negotiating with highly experienced buyers. This isn’t like selling to a younger therapist down the street. It’s a different league.

Key Considerations

When preparing to sell, buyers will look beyond your gross revenue. They want to understand the quality and sustainability of your earnings. For your orthopedic and rehab practice in San Diego, they will focus heavily on your referral sources. Are they diverse and well-established with local orthopedic groups and case managers? They will also scrutinize your payer mix. A healthy balance between Medicare, PPO, and Workers’ Comp signals stability. Finally, the quality of your staff and facility is a major factor. A buyer is looking for a turnkey operation, not a project they have to rebuild. Each of these elements contributes to your practice’s story and, ultimately, its value.

Market Activity

The theory is one thing, but what is actually happening on the ground in Southern California? The market is not just active; it is dynamic. Specific transactions and buyer behaviors show a clear momentum that favors well-prepared sellers.

Here are three major trends we see driving market activity right now:

1. Private Equity is Aggressively Buying. Investment from private equity in healthcare is at a peak. These groups are actively seeking profitable, well-run orthopedic rehab practices to add to their growing platforms. They have the capital to pay premium prices, but they are also exceptionally thorough in their analysis.
2. Strategic Buyers are Expanding. Larger physical therapy companies are continuously looking to expand their footprint in desirable markets like San Diego. We see them acquiring smaller practices to gain market share, referral networks, and talented therapists.
3. Local Deals are Happening. It is not just multi-million dollar practices that are selling. We see established, smaller practices with solid revenues listed and sold, often to local entrepreneurs or expanding regional groups. This indicates a healthy market at multiple levels.

The Sale Process

The path from deciding to sell to closing the deal follows several key stages. It begins long before you speak to a buyer. The first step is a professional valuation to understand what your practice is truly worth. From there, we work with you to prepare confidential marketing documents that tell your practice’s story. We then identify and discreetly approach a curated list of qualified buyers. After fielding initial offers, you move into negotiation and, eventually, a formal Letter of Intent. The most critical phase is often due diligence, where the buyer inspects every aspect of your business. A smooth due diligence process is the key to reaching the final legal contracts and a successful closing. Proper preparation for this stage prevents surprises that can derail a transaction.

Valuation

Understanding your practice’s value is the foundation of a successful sale. Buyers do not value your practice on revenue or net income alone. They use a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). We calculate this by taking your reported profit and adding back owner-specific expenses like excess salary, personal vehicle costs, or other one-time expenses. This new, higher number is the true cash flow of your business. This Adjusted EBITDA is then multiplied by a specific number, the “multiple,” to determine your practice’s enterprise value. The multiple isn’t random; it’s determined by risk and growth potential.

Getting this calculation right is the difference between an average price and a premium one.

Post-Sale Considerations

Your work is not finished the day the papers are signed. A successful transition requires careful planning for what comes next. How will the sale be structured to maximize your after-tax proceeds? Will you stay on for a transition period, and what will that role look like? Many deals today include an “earnout” or an opportunity to “roll over” equity into the new, larger company, giving you a second potential payday down the road. Most importantly, how will the deal protect your staff and the legacy you have spent years building? Thinking through these elements beforehand ensures the transition meets your personal and financial goals, not just the buyer’s.