Navigating the Nashville market to achieve your personal and financial goals.
Executive Summary
If you are an oncology practice owner in Nashville, this is a critical time to understand your options. The market is experiencing significant growth and buyer interest, creating unique opportunities for physicians considering a sale. This guide provides a direct look at the current landscape, key steps for a successful transition, and how to best position your practice. Navigating this process requires a clear strategy to protect your legacy and maximize your financial outcome.
Market Overview
The timing for selling an oncology practice in Nashville is strong. Nationally, the oncology sector is not just stable; it’s expanding rapidly with a projected annual growth rate of over 11% through 2034. This means more investment and more buyers are entering the space.
Here in Nashville, our status as a major healthcare hub amplifies this trend. You operate in a city with a large and growing patient population that can readily support oncology services. This combination of national market health and local demand makes Nashville a highly attractive location for buyers seeking to expand their footprint.
Key Considerations
A successful sale doesn’t happen overnight. It’s the result of careful, long-term planning. Many owners think about selling only when they9re ready to retire, but the most successful transitions begin years in advance. In our experience, buyers pay for proven performance, not just potential.
Here are three areas to focus on now, even if your sale is 2-3 years away:
- Get Your Financials in Order. Buyers look for clean, clear financial records that demonstrate profitability and a healthy growth trajectory. This is the foundation of your practice’s value.
- Understand Your True Value. A professional valuation is more than just a number. It helps you see your practice through a buyer’s eyes and identifies opportunities to increase its worth before you go to market.
- Think About Transition. What will happen to your staff? What role, if any, will you play after the sale? Having a clear transition plan shows buyers that the practice is stable and ready for new ownership.
Market Activity
The Nashville oncology market is not just growing. It is actively consolidating. Independent practices are increasingly joining larger groups to gain resources and better navigate healthcare reforms. This trend is driven by two main types of buyers.
Strategic Acquirers
These are large, national oncology networks, such as the US Oncology Network. They are already established in Tennessee and are looking to expand their local partnerships. They seek practices that can integrate well into their existing platform, offering shared resources and a broad referral base.
Private Equity Groups
Firms like OneOncology, which is headquartered right here in Nashville, represent another major force. Backed by financial investors, these groups are building platforms of top-tier independent practices. They focus on bringing business expertise and capital to help practices grow, often while allowing physicians to maintain clinical autonomy. The presence of these sophisticated buyers is a clear sign of the market’s strength.
Sale Process
Selling a practice may seem daunting, but it follows a structured path. Understanding the major steps helps demystify the journey from your initial decision to the closing table. While every deal is unique, the process generally follows these key stages.
- Preparation and Positioning. This first step involves getting your financial, operational, and legal documents in order. It’s also where we help you frame the story of your practice what makes it valuable beyond just the numbers.
- Valuation and Marketing. Once prepared, a formal valuation establishes a credible asking price. We then confidentially approach a curated list of qualified buyers who are the right fit for your practice and goals.
- Negotiation and Due Diligence. After you receive offers, we move into negotiation. The chosen buyer will then conduct due diligence, a deep review of your practice. This is often the most intense phase, and where a well-prepared practice can really shine. Proper preparation here prevents surprises that could derail a deal.
Valuation
How do buyers determine what your oncology practice is worth? They don’t use a rule of thumb based on revenue. Sophisticated buyers focus on one key metric: Adjusted EBITDA.
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. Think of it as the core profitability of your practice. We then “adjust” it by adding back personal or one-time expenses (like a vehicle lease or above-market owner salary) to show a buyer the practice’s true cash flow.
This Adjusted EBITDA is then multiplied by a number (the “multiple”) to arrive at your practice’s Enterprise Value. The multiple isn’t random. It reflects the quality and risk of your earnings.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | Relies on a single owner | Associate-driven with multiple providers |
| Growth | Flat patient volume | Strong, consistent growth history |
| Services | Core oncology services only | Ancillary services (e.g., in-house pharmacy) |
| Systems | Basic manual processes | Modern EMR & efficient systems |
A comprehensive valuation is the only way to know where your practice truly stands.
Post-Sale Considerations
The transaction itself is a major milestone, but the journey isn’t over at closing. A successful sale also includes a well-designed plan for what comes next. Your legacy, your team, and your own future role are all critical parts of the equation. Thinking about these elements early in the process ensures they are protected in the final agreement.
Here are a few key areas we help owners plan for:
- Your Personal Transition. Do you want to retire immediately, or would you prefer to stay on for a few years? A clear transition plan for the selling physician is a priority for any buyer and ensures continuity of care for your patients.
- Protecting Your Staff. Your team is one of your practice’s most valuable assets. Ensuring they have a secure and promising future under new ownership is often a top priority for selling physicians. This can be a key point of negotiation.
- Structuring Your Proceeds. A sale can be more than just a cash payment. Structures like equity rollovers, where you retain ownership in the larger company, can provide a “second bite at the apple” and significant future upside.
Frequently Asked Questions
What is the current market outlook for selling an oncology practice in Nashville, TN?
The market for selling oncology practices in Nashville is very strong due to rapid national sector growth projected at over 11% annually through 2034 and Nashville’s status as a major healthcare hub with a growing patient base, attracting many buyers and investors.
What are the key steps I should take to prepare my oncology practice for sale?
Key steps include: 1) Getting your financials in order by maintaining clean, clear records showing profitability and growth; 2) Understanding your true value through a professional valuation to see your practice from a buyer’s perspective; and 3) Planning your transition including your future role and staff arrangements to demonstrate stability and readiness for new ownership.
Who are the typical buyers interested in acquiring oncology practices in Nashville?
There are mainly two types of buyers: Strategic Acquirers like large national oncology networks expanding local partnerships, and Private Equity Groups such as OneOncology, which seek to build platforms of strong independent practices while often allowing physicians to retain clinical autonomy.
How is the value of an oncology practice determined during the sale?
Value is primarily determined using Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which shows core profitability adjusted for one-time or personal expenses. This figure is multiplied by a ‘multiple’ reflecting factors such as provider model, growth, types of services offered, and systems efficiency to calculate enterprise value.
What should I consider post-sale when planning the transition after selling my oncology practice?
Post-sale considerations include: 1) Your personal transition plan regarding retirement or continued involvement; 2) Protecting your staff’s future employment and benefits under new ownership; and 3) Structuring your proceeds, possibly including equity rollovers for ongoing financial benefits beyond the initial sale.
