Selling your Occupational & Hand Therapy practice is one of the most significant financial decisions of your career. For owners in New Mexico, the current market presents a unique set of opportunities and challenges. This guide offers a clear, straightforward look at the landscape, from understanding your practice’s value to navigating the sale process. We aim to give you the clarity needed to make the best decision for your future, your staff, and your legacy.
Market Overview
The healthcare landscape in New Mexico, much like the rest of the country, is in a period of consolidation. For independent Occupational and Hand Therapy practice owners, this creates both pressure and opportunity. The demand for specialized therapeutic services is strong, driven by an active populace and an aging demographic. This has not gone unnoticed by larger healthcare organizations and private equity groups.
Growing Demand Meets Strategic Interest
Larger regional and national therapy platforms are actively seeking to expand their footprint in the Southwest. New Mexico, with its distinct patient communities, represents a key growth area. They are looking for well-run, reputable practices to acquire as a foothold or to build upon their existing presence. These buyers are often interested in practices with strong community ties and a consistent history of patient outcomes.
The Independent Practice Advantage
While consolidation is a major trend, it does not mean the end of the independent practice. In fact, your independence and local reputation are your greatest assets. Buyers are not just purchasing equipment and leases; they are buying your goodwill and the clinical expertise you have cultivated. Understanding how to position these unique strengths is the first step toward a successful sale.
Key Considerations
When you begin to think about selling, your focus should shift from day-to-day operations to strategic value drivers. For an Occupational & Hand Therapy practice in New Mexico, certain factors carry more weight with potential buyers. These include the stability of your referral sources, particularly relationships with local orthopedic surgeons and primary care physicians. The diversity of your payer mix and the credentials of your clinical team, especially the presence of Certified Hand Therapists (CHTs), are also critical.
Perhaps the most important factor is how dependent the practice is on you, the owner. A practice that can operate smoothly with associate therapists is significantly more valuable than one where the owner is the primary producer. Addressing these areas long before you plan to sell is the key to maximizing your final sale price.
Your specific goals and timeline should drive your practice transition strategy.
Market Activity
While specific deal details in New Mexico are often kept confidential, the national trend of acquisitions in the physical and occupational therapy space is very active. This activity is driven by a few key types of buyers, each with different goals and structures. Understanding who might be interested in your practice helps you prepare for the right conversations.
Three Buyer Types to Watch in New Mexico
- Strategic Acquirers: These are typically large, regional, or national therapy companies. They are looking to enter or expand in the New Mexico market. They often bring sophisticated operational support but may have a more corporate culture. They pay a premium for practices that give them immediate scale.
- Private Equity-Backed Platforms: These buyers acquire practices to build a larger group, which they intend to sell again in 5-7 years. They are highly focused on financials, particularly a metric called EBITDA. A partnership with them can sometimes include you retaining some ownership, offering a potential “second bite of the apple” when the larger platform sells.
- Local Competitors or Individual Buyers: A smaller, local practice or an ambitious therapist might look to acquire your practice to grow their own business. These deals can be simpler but may offer a lower valuation compared to larger, well-funded buyers.
Finding the right type of buyer for your practice depends on your specific goals.
Sale Process
Selling your practice is not an event, it is a process. From the outside, it can seem complex, but we find it helpful to think of it in four main phases. It begins with preparation, where we work with you to get your financials in order and perform a comprehensive valuation. This step ensures you are not just guessing what your practice is worth.
Next comes confidential marketing, where we identify and approach a curated list of qualified buyers without your name or location being revealed. Once interest is established, you move into negotiation and due diligence. This is where buyers scrutinize your operations and financials. Proper preparation earlier on prevents surprises here. The final phase is closing the deal and planning the transition. A well-managed process protects your interests and reduces stress at every stage.
Preparing properly for buyer due diligence can prevent unexpected issues.
Valuation
“What is my practice worth?” is the first question every owner asks. The answer is more than just a simple formula. At its core, your practice’s value is typically calculated as a multiple of its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Adjusted EBITDA is your net profit after adding back owner-specific expenses and normalizing your salary to a fair market rate.
This Adjusted EBITDA figure is then multiplied by a number, the “multiple,” which is determined by the market. This multiple is influenced by many factors. A solo practice where the owner sees all the patients will receive a lower multiple than a multi-therapist practice with a strong growth trajectory.
Here are some key factors that impact your valuation:
| Value Drivers | Value Detractors |
|---|---|
| Multiple therapists, especially CHTs | High dependence on the owner’s personal production |
| Strong, diverse referral network | Concentrated patient sources from a single doctor |
| Clean, well-documented financials | Messy or incomplete financial records |
| Favorable payer contracts and mix | High percentage of low-reimbursement plans |
| Documented growth in revenue and patient volume | Stagnant or declining performance |
Understanding these drivers is the first step. Getting a professional valuation is how you turn that understanding into a concrete number.
Curious about what your practice might be worth in today’s market?
Post-Sale Considerations
The conversation about selling your practice should not end with the price. What happens the day after the transaction closes is just as important. You need a clear plan for your own future, whether that involves staying on to practice for a few years, retiring completely, or pursuing a new venture. We find this part of the process is where owners need the most guidance.
Protecting your team’s future and ensuring a smooth transition for your patients is key to preserving the legacy you have built. The structure of your sale also has major tax implications that can significantly affect your net proceeds. Planning for these elements from the beginning ensures that your exit is not only financially successful but personally fulfilling. Every sale is unique, and your personal goals should be the foundation of the entire strategy.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What is the current market environment for selling an Occupational & Hand Therapy practice in New Mexico?
The New Mexico market is experiencing consolidation in healthcare, with strong demand for occupational and hand therapy services. Larger regional and national therapy platforms are interested in acquiring reputable, well-run practices to expand in the Southwest, providing opportunities for sellers.
What are key factors buyers consider when purchasing an Occupational & Hand Therapy practice in New Mexico?
Buyers prioritize the stability of referral sources, especially local orthopedic surgeons and primary care physicians, a diverse payer mix, credentials of the clinical team including Certified Hand Therapists (CHTs), and the practice’s ability to operate independently of the owner.
Who are the typical buyers for Occupational & Hand Therapy practices in New Mexico?
Buyers typically fall into three categories: strategic acquirers (large regional or national therapy companies), private equity-backed platforms that focus on financial growth and may offer partial ownership, and local competitors or individual therapists seeking to grow their business.
How is the valuation of an Occupational & Hand Therapy practice determined?
Valuation is generally calculated using a multiple of the practice’s Adjusted EBITDA, which measures net profit with owner-specific expenses adjusted. Key value drivers include multiple therapists (especially with certifications), a strong referral network, clean financials, and favorable payer contracts. Dependence on the owner and incomplete records can lower valuation.
What should sellers consider after the sale of their Occupational & Hand Therapy practice?
Sellers should plan for post-sale activities including whether to retire, stay on temporarily, or pursue new ventures. Protecting the team’s future and ensuring patient transition is critical. Additionally, understanding tax implications of the sale structure early on will help maximize net proceeds and ensure a fulfilling exit.
