Guide to Selling a GI & Hepatology Practice in Salt Lake City, UT

Selling your GI & Hepatology practice is a significant financial and personal event. For practice owners in Salt Lake City, the current healthcare landscape presents a unique window of opportunity. This guide provides a clear overview of the market, key steps in the sale process, and how to understand your practice’s true value. We will help you navigate the path toward a successful and rewarding transition.

Market Overview

The Salt Lake City healthcare market is expanding. This growth is fueled by a strong economy and an increasing population, making the region a magnet for healthcare investment. Both local health systems and national investor groups are actively looking for opportunities to expand their footprint here. This competitive environment is good news for practice owners considering a sale.

A Thriving Healthcare Hub

Salt Lake City is recognized for its high-quality healthcare infrastructure. This reputation attracts not only patients but also sophisticated buyers, including private equity firms and large strategic groups. These buyers are looking for well-run practices with a history of stable performance and potential for growth. They see the value in established GI and Hepatology groups that serve the community.

What This Means for Your Practice

For a GI & Hepatology practice owner, this market dynamic creates significant leverage. You are not just selling a business. You are selling a strategic asset in a desirable location. Understanding how to position your practice to appeal to these different buyer types is a key part of maximizing your sale price and achieving your personal goals.

Key Considerations for Selling

Beyond the favorable market, a successful sale depends on the specific attributes of your practice. Buyers will look closely at your operations and financials. Here are three areas that have a major impact on valuation and deal success.

1. Your Financial Story. Buyers value clean, clear financials. The key metric they use is Adjusted EBITDA, not just the net income on your tax return. This involves “normalizing” your earnings by adding back personal expenses run through the business or adjusting owner salaries to market rates. Getting this number right is the foundation of your valuation.

2. Provider and Patient Mix. A practice that does not rely solely on the owner-physician is more valuable. If you have associate physicians or a strong referral network, it reduces the perceived risk for a buyer. Similarly, a healthy mix of payers demonstrates stability. Buyers will analyze this to understand the quality and durability of your revenue streams.

3. Your Personal Goals. What do you want to achieve with this sale? Do you want to retire immediately, or are you open to working for a few more years? Do you want to retain some ownership? Answering these questions early helps identify the right type of buyer and structure a deal that protects your legacy and your team.

Market Activity

While specific sales of GI practices in Salt Lake City are not usually public knowledge, we can see clear trends nationally that are shaping the local M&A landscape. The era of independent physician practices is changing, with consolidation becoming the norm across many specialties, including gastroenterology.

The Influence of New Buyers

A major driver of this activity is private equity. These investment firms see GI and Hepatology as a stable field with opportunities for growth through adding ancillary services and expanding into new locations. They are often able to pay higher multiples than a local hospital or another individual physician because they have a different investment model. For a seller, this means a new class of potential partners who bring capital and business expertise.

Why a Competitive Process Matters

With different types of buyers in the market, from local health systems to national private equity groups, it is important to not just take the first offer that comes along. Each buyer type has different goals and will propose different deal structures. Running a confidential, competitive process where multiple qualified buyers are brought to the table is the only way to create the tension needed to achieve the highest possible valuation and best terms.

The Sale Process Explained

Selling a practice can feel like a complex journey, but it follows a structured path. Understanding these stages can help you prepare for what lies ahead. We see the process in four main phases.

1. Preparation and Valuation. This is the foundational stage. It involves organizing your financial and operational documents and getting a realistic, professional valuation. This is also where you define your goals for the transition. Proper preparation here prevents surprises later.

2. Confidential Marketing. The next step is confidentially marketing your practice to a curated list of qualified buyers. This is not about listing your practice for sale publicly. It’s a discreet process managed by an advisor to generate interest without disrupting your staff, patients, or referral sources.

3. Negotiation and Due Diligence. Once offers are received, you negotiate the best terms. The selected buyer will then conduct due diligence, a deep dive into your practice’s financials, contracts, and operations. This is often the most intensive phase of a sale and where many deals can stall without proper guidance.

4. Closing and Transition. The final stage involves legal documentation, signing the purchase agreement, and managing the transition of ownership. A well-planned transition ensures a smooth hand-off for your staff and patients.

How Your Practice is Valued

A practice’s value is not determined by its assets or a simple rule of thumb. Sophisticated buyers use a formula: Adjusted EBITDA multiplied by a market-based Multiple.

Adjusted EBITDA is your real cash flow after adding back personal expenses and normalizing owner compensation. The Multiple is a number that reflects your practice’s risk and growth potential. It is influenced by factors like your practice’s size, reliance on a single provider, and growth trajectory. GI practices with strong ancillary service lines often command higher multiples.

Here is a simplified example of how this works.

This final number is the starting point for negotiations. It shows why properly calculating your Adjusted EBITDA is the single most important step in understanding your practice’s worth.

After the Sale: Planning Your Next Chapter

The transaction is not the end of the story. A successful deal includes a clear plan for what comes next for you, your team, and your legacy. The decisions you make during negotiations will shape your post-sale reality.

1. Defining Your New Role. Many deals, especially with private equity partners, involve the selling physician staying on for a period of time. You can often structure a role that allows you to focus purely on clinical work while the new partner handles the administrative burdens. This preserves your clinical autonomy.

2. The Second Bite of the Apple. You may have the opportunity to “roll over” a portion of your sale proceeds into equity in the new, larger company. This means you retain ownership and can benefit from a second, often larger, payout when the entire platform is sold again in the future.

3. Protecting Your Team and Legacy. Your staff is a critical asset. A key part of any negotiation is ensuring your team is treated well and that their futures are secure. The right partner will see the value in your team and culture and will want to preserve it. Planning for this protects the legacy you have built over many years.