The market for Sports Medicine & Performance Therapy practices is active, and Ohio is no exception. For practice owners, this presents a significant opportunity. But a successful sale doesn’t just happen. It requires understanding the current M&A landscape, preparing your practice correctly, and navigating a complex process. This guide provides a direct look at what you need to know.
Market Overview: A Seller’s Climate
The environment for selling a therapy practice is currently strong. This is driven by both national trends and local activity, creating favorable conditions for owners who are prepared to act.
National Tailwinds
The entire U.S. physical therapy market is expanding, projected to grow at a healthy 4.6% annually through 2030. This growth attracts buyers. Large strategic acquirers and private equity firms are actively looking for established practices to add to their platforms. They see the value in well-run clinics and are willing to pay for them. This means you have a receptive audience if you decide to explore a sale.
The Ohio Landscape
While national trends are positive, the local market is what matters most. In Ohio, we see consistent M&A activity in the physical and performance therapy space. Buyers are looking for practices with a solid reputation, a stable team, and a clear path for growth. This combination of national interest and local demand makes now an interesting time for Ohio practice owners to evaluate their options.
Key Considerations Before You Sell
A favorable market is a great starting point. But maximizing your practice’s value requires proactive planning. Many owners think they should only start preparing when they are ready to sell. The truth is, the preparation process should begin years in advance. Buyers pay for proven performance, not just potential.
Here are a few things to focus on now.
- Clean Up Your Financials. Buyers value a practice based on its profitability, specifically its Adjusted EBITDA. This isn’t just the profit on your tax return. It involves normalizing expenses like your personal salary or one-time costs to show the practice’s true earning power.
- Reduce Owner Reliance. If every patient and every key decision depends on you, buyers see that as a risk. Building systems and empowering your team to operate without your constant involvement makes the practice a more valuable and transferable asset.
- Understand Your Growth Story. What makes your practice attractive for the future? Is it a unique service, a prime location, or an opportunity to expand? Being able to clearly explain your growth potential is key to attracting premium buyers.
Market Activity in Ohio
Talk of an active market is one thing. Seeing real examples brings it to life. While every practice is unique, looking at recent transactions in the state can provide a useful perspective. These deals show that practices of different sizes are successfully finding buyers.
The key takeaway is that value is not just about gross revenue. It is about profitability, location, and structure.
| Location | Gross Revenue | Details | Sale/List Price |
|---|---|---|---|
| Northern Ohio | $793,434 | 3-Location PT Practice | Listed for $375,000 |
| Central Ohio | $300,000 | Single Location PT | Sold for $100,000 |
These examples highlight the wide range of valuations. Understanding where your practice fits requires a detailed analysis that goes far beyond simple revenue multiples.
The Five Stages of a Practice Sale
Selling your practice is a structured project, not a single event. A well-managed process protects your confidentiality, creates competitive interest, and prevents deals from falling apart at the last minute. Simply listing your practice for sale is not a strategy. A professional process ensures you find the right partner, not just the first one.
It generally follows five main stages.
- Preparation. This involves organizing financials, defining your growth story, and identifying potential deal-killers before you go to market.
- Valuation. A comprehensive valuation is performed to establish a credible and defensible price range.
- Marketing. Your advisor confidentially approaches a curated list of qualified strategic and financial buyers to solicit interest.
- Due Diligence. The top bidder is granted access to thoroughly inspect your operations and financials. This is where most un-prepared deals encounter problems.
- Closing. Final legal documents are negotiated and signed, and the transaction is completed.
How Your Practice is Valued
Many owners mistakenly believe their practice is not worth enough to sell or that its value is simply a percentage of revenue. While therapy practices often trade for 0.5x to 2.5x annual revenue, sophisticated buyers look much deeper.
Beyond Revenue
The most important metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). We start with your stated profit and then “add back” expenses that a new owner would not incur. This includes excess owner salary, personal vehicle leases, or other one-time costs. This process reveals the true cash flow of the business, which is what buyers are purchasing. Most practices are worth more than their owners think once EBITDA is properly calculated.
Key Value Drivers
The multiple applied to your Adjusted EBITDA depends on several factors specific to your practice. A multi-provider clinic with a strong growth profile will command a higher multiple than a solo practice. A stable base of in-network patients is often viewed more favorably than a pure cash-pay model. Understanding these drivers is the first step to maximizing your final sale price.
Post-Sale Considerations: Securing Your Future
The transaction is not the end of the story. Selling your practice involves important decisions about your personal and financial future. A common fear is losing control or seeing the culture you built disappear. The right deal structure can address these concerns directly. Planning for these outcomes before the sale is critical.
A successful transition plan should account for a few key areas.
- Defining Your New Role. You dont have to just walk away. Many deals involve the owner staying on for a period of time. Some deals, like strategic partnerships or minority recapitalizations, are designed to keep you at the helm while providing capital for growth. Control is not a binary choice.
- Protecting Your Legacy and Staff. Your team and the reputation you built have value. The right buyer will recognize this and see them as assets to protect. This should be a key point of discussion when vetting potential partners.
- Optimizing Your Financial Outcome. The structure of your deal has major implications for your after-tax proceeds. Planning for this from the start ensures you keep as much of your hard-earned value as possible.
Frequently Asked Questions
What is the current market environment for selling a Sports Medicine & Performance Therapy practice in Ohio?
The market for Sports Medicine & Performance Therapy practices in Ohio is active and favorable for sellers. This is driven by both national growth trends in physical therapy and consistent local M&A activity, attracting buyers such as large strategic acquirers and private equity firms.
What should practice owners in Ohio focus on to maximize the value of their practice before selling?
Owners should start preparing years in advance by cleaning up financials to highlight profitability (Adjusted EBITDA), reducing owner reliance by building systems and empowering the team, and clearly articulating their practice’s growth story based on unique services, location, or expansion opportunities.
How are Sports Medicine & Performance Therapy practices valued during a sale?
Practices are primarily valued based on their Adjusted EBITDA rather than just revenue. This involves normalizing expenses to reflect true cash flow. Multiples applied depend on factors like practice size, growth profile, patient mix, and location, with multi-provider clinics generally commanding higher multiples.
What are the main stages in the process of selling a Sports Medicine & Performance Therapy practice?
There are five main stages: 1) Preparation—organizing financials and growth story, 2) Valuation—establishing price range, 3) Marketing—confidentially reaching qualified buyers, 4) Due Diligence—buyer inspects operations and financials, and 5) Closing—negotiating legal documents and completing the transaction.
What should a practice owner consider post-sale to protect their future interests?
Post-sale considerations include defining a new role if staying on temporarily, protecting the legacy and staff by choosing a buyer who values them, and optimizing financial outcomes by planning deal structure and tax implications to maximize proceeds.
