The market for selling a medical practice is changing quickly. For owners of Sports Medicine & Performance Therapy practices in North Carolina, this presents a unique opportunity. Buyer interest is high, but achieving your practice’s peak value requires more than just good timing. It requires a deep understanding of the market, a solid strategy, and careful preparation. This guide will walk you through the key factors to consider, from valuation to navigating state-specific regulations, to help you make an informed decision about your future.
Market Overview: The North Carolina Advantage
North Carolina’s healthcare sector is not just growing; it is fundamentally changing. Understanding these shifts is the first step toward a successful sale of your Sports Medicine & Performance Therapy practice.
A Growing and Consolidating Landscape
The state’s physician workforce grew an impressive 22% in the decade leading up to 2023. At the same time, the market has seen a dramatic consolidation. Between 2012 and 2022, the percentage of North Carolina physicians in private practice fell from over 60% to just 42%. This trend shows a clear pattern. Independent practices are increasingly being acquired by larger health systems and private equity-backed groups looking to expand their footprint. For you, this means the most likely buyers are experienced, well-capitalized, and strategic.
High Demand for Specialized Care
While primary care faces certain pressures, specialized fields like sports medicine and performance therapy are viewed as high-growth assets. Your practice’s focused services, established patient base, and referral networks make it an attractive target for buyers seeking to add profitable service lines. This demand puts you in a strong position, but only if you navigate the process correctly.
Key Considerations for Your NC Practice
Beyond market trends, selling a medical practice in North Carolina involves navigating a specific set of state-level rules. Overlooking these can delay or even derail a transaction. Here are three critical areas you must address.
- North Carolina Medical Board Approval. Any change in the ownership of a professional medical corporation requires prior approval from the NC Medical Board. This is not a rubber-stamp process. It requires proper documentation and timing within your sale process.
- The Corporate Practice of Medicine (CPOM). North Carolina has some of the strictest CPOM laws in the country. These laws govern who can own a medical practice and employ physicians. If your potential buyer is a private equity firm or another non-physician entity, structuring the deal to comply with CPOM is absolutely critical. A mistake here can invalidate the entire sale.
- Physical Therapy Practice Act. As a practice offering performance therapy, you must be aware of the state’s specific rules. Recent changes have expanded the scope of practice, which can be a value-add. However, ensuring your entire team’s services, like dry needling, are fully compliant is a key part of buyer due diligence.
Market Activity: Who Is Buying and Why
It is a seller’s market, but the buyers are more strategic than ever. The dominant trend shaping practice sales today is the increasing role of private equity (PE) and other large-scale investors.
The National Wave of Investment
Across the country, investors are pouring capital into specialized medical fields. They are not looking to buy a job; they are looking to acquire platforms for growth. They see practices like yours as stable businesses with predictable revenue, a strong reputation, and opportunities to scale by adding locations or services. This is a significant shift from the traditional model of a retiring doctor selling to a younger associate.
The Trend Hits Home in North Carolina
This is not just a national phenomenon. It is happening right here. The sale of OrthoCarolina’s physical therapy business to PT Solutions, a prominent private equity-backed company, is a clear signal. It shows that sophisticated buyers are actively targeting practices in the musculoskeletal space within our state. For you, this means there is likely a pool of well-funded buyers looking for a practice just like yours. The key is creating a process that brings them to the table competitively.
Unpacking the Sale Process
Many owners think selling a practice is a single event, but it is a multi-stage process that typically takes six months or more. While every sale is unique, most follow a clear path. Understanding it can help you prepare.
I often advise clients that the process breaks down into five main phases.
- Preparation and Strategy. This is where you organize your financials, review operations, and define your goals. Are you looking for a full exit or a strategic partner for growth? Answering this now shapes the entire process.
- Valuation. Before you go to market, you need a comprehensive, defensible valuation. This becomes the foundation for your asking price and negotiation strategy.
- Confidential Marketing. Your advisor will identify and discreetly approach a curated list of potential strategic buyers without your name or practice details being public.
- Negotiation and Due Diligence. After initial offers are received, you negotiate terms. The chosen buyer then conducts a deep dive into your financials, operations, and compliance. This is where most deals face challenges if you are not prepared.
- Closing. The final stage involves legal documentation, regulatory approvals (like from the NC Medical Board), and the final transfer of ownership.
What Is Your Practice Really Worth?
One of the first questions every practice owner asks is, “What is my practice worth?” The answer is more complex than a simple multiple of your revenue. Sophisticated buyers value your practice based on its profitability and future potential. The key metric they use is Adjusted EBITDA.
This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. More simply, it is the true cash flow your business generates. We calculate it by taking your net income and adding back owner-specific perks and one-time expenses. A higher Adjusted EBITDA leads directly to a higher valuation. This number is then multiplied by a “multiple” to determine your practice’s Enterprise Value. That multiple is not fixed. It is influenced by several factors specific to your practice.
| Factors That Increase Your Multiple | Factors That Decrease Your Multiple |
|---|---|
| Multiple providers, not reliant on one owner | High dependence on a single owner/provider |
| Strong referral network and diverse patient base | Concentrated patient or referral sources |
| Multiple locations or clear expansion potential | Single location with physical limitations |
| Strong cash-pay and diversified insurance mix | Heavy reliance on low-reimbursement payers |
| Efficient operations and well-documented systems | Inefficient processes and poor record-keeping |
A “rule of thumb” might give you a number, but a professional valuation tells you a story that justifies the highest possible multiple.
Planning for Life After the Sale
The day the transaction closes is not the end of the story. A successful sale includes a clear plan for what comes next, for you, your staff, and your patients. The best deals are structured with the future in mind from the very beginning.
Protecting Your Team and Legacy
You have spent years building your practice and your team. Ensuring a smooth transition for your loyal staff and continuity of care for your patients is a critical part of protecting your legacy. This involves negotiating terms that safeguard your team’s future and communicating the transition plan clearly. Finding a buyer who respects your culture is just as important as the sale price.
Structuring Your Exit
Do you want to walk away completely, or would you prefer to stay on for a few years? Many modern deals, especially with private equity, involve structures that allow for a gradual exit. This can include an equity rollover, where you retain a minority stake in the new, larger company. This gives you a “second bite at the apple” when that larger company sells again in the future.
Maximizing Your Financial Outcome
The structure of your sale has huge tax implications. Planning ahead can significantly increase your net, after-tax proceeds. An expert can model different scenarios to help you understand the financial impact of every decision, ensuring you are not just getting a great price, but keeping more of it.
Your personal and financial goals should drive the entire exit strategy. The right approach is the one that is custom-built for you.
Frequently Asked Questions
What are the key market trends affecting the sale of Sports Medicine & Performance Therapy practices in North Carolina?
The North Carolina market is experiencing significant growth and consolidation. Physician workforce grew by 22% over the past decade, but private practice physicians declined from 60% to 42%. Buyers are mostly large health systems and private equity groups seeking to expand. Specialized practices like sports medicine are in high demand due to their profitability and growth potential.
What North Carolina-specific regulations must I consider when selling my Sports Medicine & Performance Therapy practice?
You must obtain approval from the North Carolina Medical Board for ownership changes, comply with strict Corporate Practice of Medicine (CPOM) laws that limit non-physician ownership, and ensure adherence to the Physical Therapy Practice Act, including scope of services like dry needling. These regulations are critical to avoid transaction delays or invalidation.
Who are the typical buyers for Sports Medicine & Performance Therapy practices in North Carolina?
Typical buyers include well-capitalized private equity firms, larger healthcare organizations, and strategic investors looking to acquire specialized practices as growth platforms. This reflects a national and state trend where such buyers prioritize scalable, profitable medical practices with strong reputations and stable revenue.
How is the valuation of my North Carolina Sports Medicine & Performance Therapy practice determined?
Valuation is primarily based on Adjusted EBITDA – the true cash flow of your business after adding back owner perks and one-time expenses. Factors influencing valuation multiples include provider diversity, referral networks, locations, payer mix, and operational efficiency. A professional valuation helps maximize your asking price beyond simple revenue multiples.
What should I plan for after selling my Sports Medicine & Performance Therapy practice in North Carolina?
Post-sale planning includes securing your team’s future and patient care continuity, deciding whether to fully exit or take a gradual exit with options like equity rollover, and optimizing financial outcomes by tax planning. A well-structured sale custom-built to your personal and financial goals ensures a successful transition and maximizes your net proceeds.
