Guide to Selling a Pediatric Physical Therapy Practice in Portland, OR

Selling your pediatric physical therapy practice is a major decision. In Portland, the current market presents a significant opportunity for practice owners who are well-prepared. This guide offers insight into the market dynamics, key legal considerations unique to Oregon, and the steps involved in navigating a successful sale. Understanding these elements is the first step toward realizing the full value of the practice you have built.

Curious about what your practice might be worth in today’s market?

Market Overview

The demand for pediatric physical therapy is strong and growing. Nationally, the market is projected to nearly double by 2031, with an impressive 8.4% compound annual growth rate. This trend is clearly reflected in Oregon, where the broader physical therapy industry is on track to become a $691.6 million market.

For you as a practice owner in Portland, this means one thing. Your skills and services are more valuable than ever. With a high demand for qualified physical therapists and a limited supply, private practices like yours have become highly attractive assets for buyers looking to expand in a thriving healthcare sector. The a verage PT clinic already sees substantial revenue, and in a growth market, the potential is even greater. This climate creates a competitive environment where well-run practices can command premium attention.

Key Considerations

When preparing to sell your practice in Portland, success depends on more than just market tailwinds. You need to focus on specific details unique to our region and your specialty. We find that owners who address these areas early are better positioned for a smooth and profitable transaction.

Navigating Oregon’s Ownership Laws

Oregon’s Senate Bill 951 is a critical factor in any medical practice sale. This law requires that licensed medical professionals maintain majority ownership (at least 51%) of a practice. This has major implications for who can buy your practice, particularly limiting certain corporate or private equity buyers. Your practice structure must be compliant, and any potential buyer must be able to meet these legal standards. This isn’t a roadblock, but it requires careful navigation.

Protecting Your Referral Network

Your practice’s value is deeply tied to its consistent flow of patients. A strong network of referrals from pediatricians, schools, and other community sources is one of your most valuable assets. A key part of the sale process is demonstrating the stability of these relationships and planning a thoughtful transition to a new owner to ensure they continue.

Highlighting Your Niche

What makes your practice special? Perhaps you have developed unique programs for specific conditions, built a reputation for a certain therapy style, or created an exceptionally welcoming environment for children and families. Clearly defining and communicating this “special sauce” helps you stand out and can significantly influence a buyer’s interest and offer.

Every practice sale has unique considerations that require personalized guidance.

Market Activity

The current M&A landscape for healthcare practices is active, and pediatric physical therapy is a sought-after specialty. We are seeing a steady flow of transactions as both independent providers and larger strategic groups look to expand their footprint in desirable locations like Portland. With a projected need for over 13,000 new physical therapists annually nationwide, demand for established practices far outstrips the supply.

This imbalance creates a sellers market. It means that if your practice is profitable and well-managed, you will likely attract interest from multiple qualified buyers. This competitive tension is key to achieving a top-tier valuation. However, managing that interest to drive the best outcome requires a structured approach. It is not about just finding one buyer; it is about creating an environment where the right buyers compete for the opportunity to continue your legacy.

The Sale Process

Selling a medical practice can feel complex, but it follows a logical path. Breaking it down into clear stages helps demystify the journey from decision to closing. A well-managed process protects your confidentiality and keeps you in control.

1. Strategic Preparation
   This is the most important phase. It involves a deep dive into your financials to get a clear picture of your profitability (Adjusted EBITDA), organizing your documents, and identifying any operational improvements that could increase value. This is also when we work with owners to define their personal goals for the sale. Answering “I don’t want to sell right now” with “Thats exactly when you should start” is something we believe in. Preparation ensures you sell on your terms.

2. Confidential Marketing
   Your practice is marketed to a curated list of qualified, vetted buyers without revealing its identity. We do not just “list” your practice. We tell its story to buyers who we know are a good fit financially and culturally.

3. Managing Due Diligence
   Once a letter of intent is signed, the buyer will conduct a thorough review of your practice. This is often where deals can face challenges. Being prepared with clean financials and organized records makes this stage smoother and builds buyer confidence.

4. Finalizing the Transaction
   This final stage involves negotiating the definitive purchase agreements with legal counsel and planning for a smooth transition for you, your staff, and your patients.

Preparing properly for buyer due diligence can prevent unexpected issues.

Valuation

Many practice owners mistakenly think their practice’s value is a simple multiple of their annual revenue. The reality is more nuanced and often more favorable. Sophisticated buyers value practices based on Adjusted EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It s a measure of your practice s true cash flow and profitability.

We calculate this by taking your net income and adding back non-operational or one-time expenses, like an above-market owner’s salary or personal vehicle costs. This Adjusted EBITDA figure is then multiplied by a number (a “multiple”) that reflects your practice’s specific strengths and risks. This approach gives a much more accurate picture of what your practice is worth to a buyer.

The valuation multiple is not one-size-fits-all. It is influenced by many factors.

A higher Adjusted EBITDA and a story of stability and growth lead to a higher multiple, and ultimately, a higher sale price.

A comprehensive valuation is the foundation of a successful practice transition strategy.

Post-Sale Considerations

Finalizing the sale is a huge milestone, but the journey isn’t over. Planning for what comes next is just as important as negotiating the deal itself. A successful transition ensures your legacy is protected, your team is secure, and your financial future is what you envisioned. Before you sell, it’s wise to have clear answers to a few key questions.

• What will your role be after the sale?
  Do you want to leave clinical practice entirely, or would you prefer to stay on for a few years? Many buyers are flexible and value the continuity of having the former owner remain involved. This can often be structured to your advantage.

• How will your team be cared for?
  Your staff is a huge part of your practice’s success and your legacy. Finding a buyer who shares your values and is committed to retaining and supporting your team is a critical goal for most owners we work with.

• Is the deal structured for tax efficiency?
  The structure of your sale has major implications for your after-tax proceeds. How the deal is classified, whether it is an asset or entity sale, and how payments are timed can significantly impact the amount of money you ultimately take home. Planning for this in advance is not just a good idea; it is a necessity.

The right exit approach depends on your personal and financial objectives.