Selling your cardiology practice in Oregon presents a unique opportunity. The market is active, driven by high patient demand and a notable shift toward profitable outpatient services. However, Oregon’s new, stricter regulations on practice ownership create a complex landscape that requires careful navigation. This guide provides key insights to help you understand the current environment, maximize your practice’s value, and plan a successful transition. Knowing your options is the first step.
Market Overview
The market for cardiology practices is strong, both nationally and here in Oregon. This momentum comes from several key factors that make well-run practices highly attractive to buyers.
If you are considering a sale, it’s helpful to know what is driving this demand. Three major trends are shaping the landscape:
1. An Aging Population. A growing senior population directly increases the need for comprehensive cardiac care, creating a stable and predictable patient base.
2. The Shift to Outpatient Care. Buyers are actively seeking practices with the infrastructure for outpatient procedures. The move away from hospitals toward more efficient and profitable ambulatory surgery centers (ASCs) and office-based labs (OBLs) is a powerful tailwind.
3. The Value of Ancillary Services. A practice offering more than just consultations is far more valuable. Buyers pay a premium for integrated services like cardiac imaging, catheterization labs, on-site vein clinics, or clinical research divisions that create multiple streams of revenue.
These forces create a favorable environment for sellers. However, timing your entry into the market is key to realizing your practice’s full potential.
Key Considerations
While market demand is high, selling a practice in Oregon is not as straightforward as it is in other states. Recent legislation has reshaped the environment, and physician owners must be aware of several critical factors before moving forward. The most significant is Oregon’s Senate Bill 951, which strengthens the state’s long-standing Corporate Practice of Medicine (CPOM) doctrine. This law restricts corporate ownership of medical practices, directly impacting the pool of potential buyers and the structure of a potential deal.
Beyond the legal framework, you should also consider your personal goals. For many physicians, maintaining clinical autonomy and ensuring a smooth transition for staff are just as important as the final sale price. Preparing for a sale means getting your legal, financial, and personal objectives aligned. This process is where many practice owners find that what they need is not just a broker, but a strategic advisor.
Who Is Buying Practices in Today’s Market?
The buyers interested in cardiology practices generally fall into two categories, each with a different approach to valuation and structure. Understanding them is key to shaping your exit strategy, especially within Oregon’s unique legal landscape.
Private Equity-Backed Platforms (PPMs)
These groups often offer the highest upfront purchase prices, with valuation multiples that can range from 8.0x to 18.0x of your adjusted earnings. To achieve this, the deal often includes a post-sale adjustment to physician owner compensation and requires you to “roll over” 20-40% of your proceeds into equity in the new, larger company. This gives you a potential second payout when the platform is sold again in the future, but it also comes with investment risk. Navigating these structures requires a deep understanding of how they fit within Oregon law.
Hospitals and Health Systems
Local or regional health systems are also active buyers. They typically offer a lower upfront purchase price compared to private equity. However, they often provide highly competitive and stable long-term physician employment contracts. These deals are governed by Fair Market Value (FMV) regulations, which can be a limiting factor if your practice already has very high physician compensation. The appeal here is often security and a more straightforward post-sale role.
The Sale Process From Start to Finish
A successful practice sale follows a structured path designed to protect your confidentiality and maximize value. It begins long before the practice is ever presented to a buyer. The first step is internal preparation, where we help you organize your financial and operational data so it can stand up to scrutiny. Next comes a comprehensive valuation to establish a credible asking price. Only then do we confidentially approach a curated list of qualified buyers.
Once interest is established, the most critical phase begins: due diligence. This is an intense review where the buyer inspects every aspect of your practice, from billing codes and compliance to employee contracts and financial statements. Many promising deals fall apart at this stage due to incomplete records or unexpected discoveries. Proper preparation is the best way to prevent this. After a smooth due diligence process, the final stage involves negotiating the definitive agreements that lead to a successful closing.
How Your Practice Is Valued
Valuation is more than just a formula. It’s about telling the right story with your numbers. Sophisticated buyers value your practice based on its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This isn’t the profit on your tax return. It’s a measure of true cash flow, calculated by adding back owner-specific and one-time expenses to your reported profit. Many owners are surprised to learn their practice is worth significantly more than they thought once EBITDA is properly adjusted.
This Adjusted EBITDA figure is then multiplied by a number (a “multiple”) that reflects your practice’s quality and risk. Factors that increase your multiple are what we focus on preparing before a sale.
| Factor | Impact on Your Valuation |
|---|---|
| Ancillary Services (ASC/OBL) | Significantly increases the multiple. |
| Provider Mix | An associate-driven model is valued higher than a solo-owner practice. |
| Financial Records | Clean, normalized financials build buyer confidence and command a premium. |
| Growth Potential | A clear path to future growth is something buyers will pay for today. |
A proper valuation is the foundation of a successful exit. It ensures you go to market from a position of strength.
Planning for Life After the Sale
The transaction is not the end of the story. It is the beginning of your next chapter. What that chapter looks like depends heavily on the choices you make during the sale process. A deal with a private equity partner might offer the potential for a large second payout through rollover equity, but it requires you to stay engaged and comfortable with investment risk. On the other hand, a sale to a health system might provide a structured employment agreement with a predictable salary and schedule, but perhaps with less clinical autonomy.
Thinking about these outcomes ahead of time is critical. Do you want to continue practicing full-time, work part-time, or retire completely? How important is it to protect your practice’s name and legacy? What assurances do you want for your long-time staff? Defining your personal and financial objectives upfront allows us to find the right buyer and structure a deal that secures not just your financial future, but your professional satisfaction as well.
Frequently Asked Questions
What are the main market trends driving demand for cardiology practices in Oregon?
The key market trends driving demand include an aging population increasing cardiac care needs, a shift toward outpatient care in ambulatory surgery centers (ASCs) and office-based labs (OBLs), and the value added by ancillary services such as cardiac imaging and catheterization labs.
How does Oregon’s Senate Bill 951 affect the sale of cardiology practices?
Senate Bill 951 reinforces Oregon’s Corporate Practice of Medicine doctrine, restricting corporate ownership of medical practices. This limits the pool of potential buyers and complicates deal structures for selling a cardiology practice in Oregon.
Who are the typical buyers of cardiology practices in Oregon, and what are their buying approaches?
Typical buyers include Private Equity-Backed Platforms (PPMs) which offer high upfront prices with rollover equity options but come with investment risk, and Hospitals or Health Systems which offer lower upfront prices but provide stable, long-term physician employment contracts governed by Fair Market Value regulations.
What factors can increase the valuation multiple of a cardiology practice in Oregon?
Factors that increase valuation multiples include the presence of ancillary services like ASCs or OBLs, an associate-driven provider mix rather than solo ownership, clean and normalized financial records, and clear potential for future practice growth.
What personal and professional considerations should a cardiology practice owner in Oregon keep in mind when planning to sell?
Owners should consider their goals for clinical autonomy, the transition plan for their staff, and their desired level of involvement post-sale (full-time, part-time, or retirement). Protecting the practice’s name and legacy and securing a deal that aligns with financial and professional objectives is also important.
