Selling your physical therapy practice is one of the most significant decisions of your career. In New Hampshire, the market is active, with projections showing the industry growing to nearly $200 million by 2025. This presents a great opportunity for owners. But turning that opportunity into a successful outcome requires careful planning and a clear understanding of the process. This guide will walk you through the landscape, from market conditions to valuation, so you can navigate your transition with confidence.
A Growing Market for Physical Therapy in The Granite State
The market for physical therapy in New Hampshire is healthy and expanding. For practice owners, this backdrop of growth provides a strong foundation for a potential sale. Understanding these dynamics is the first step in positioning your practice effectively.
The Growth Trajectory
The numbers paint a positive picture. The physical therapy industry in New Hampshire is on track to become a $197.8 million market by 2025. This isn’t just a national trend. It reflects a specific, local demand for services within the state’s 768 physical therapy businesses. This growth attracts buyers who are looking for established practices with a solid community presence.
An Operational Snapshot
Beyond growth, the day-to-day financial health of a practice is critical. In New Hampshire, the average reimbursement per visit is around $91.61. Your specific payer mix, clean claim rate, and billing efficiency all contribute to how a potential buyer will view your practice’s stability and profitability. Practices with strong operational metrics are always more attractive acquisition targets.
Preparing for a Successful Sale
A strong market is a great starting point, but the value you ultimately receive depends on preparation. The most successful sales we see are prepared well in advance of going to market. This is why thinking about a sale 2-3 years out is not too early. It’s the ideal timeframe.
Your preparation can be broken down into two main areas. First is your personal and operational readiness. You should be clear on your reasons for selling and ready to address any challenges that could lower your value, like unfavorable lease terms or a declining bottom line. Second is your financial and legal health. A buyer will perform deep due diligence. Having three to five years of clean, organized financial statements, up-to-date corporate records, and clear contracts is not just helpful. It is required. Cleaning this up last minute can delay a deal or, worse, kill it.
Who Is Buying Physical Therapy Practices in New Hampshire?
Today’s market is more than just local competitors looking to expand. A diverse range of buyers is actively seeking acquisitions in New Hampshire, each with different goals. Understanding who they are helps you position your practice to attract the right kind of partner.
- Strategic Acquirers. These are often larger regional or national physical therapy groups looking to expand their footprint. They are interested in your brand reputation, patient base, and location. They often have sophisticated operations and can present very attractive offers.
- Private Equity-Backed Platforms. Financial buyers are increasingly common in healthcare. They consolidate smaller practices onto a larger platform to create efficiencies. They are highly focused on financial metrics but often structure deals that allow physician owners to retain some equity and continue leading clinically. This can be a great option for owners who want to take some chips off the table but are not ready to fully retire.
- Local and Regional Practices. Your multi-location competitor down the road may also be a potential buyer. These buyers understand the local market intimately, but may not always have the capital to compete with larger strategic or financial buyers.
Understanding the Stages of a Practice Sale
The process of selling your practice follows a structured path designed to protect you and maximize your outcome. It begins long before a buyer is ever contacted. The first step is a comprehensive valuation and the preparation of marketing materials that tell your practice’s story in a compelling way.
Once prepared, the marketing phase begins under strict confidentiality, using non-disclosure agreements (NDAs) to protect your staff, patients, and reputation. After initial offers are received, you move into negotiation and due diligence. This is the most intense phase, where the buyer verifies every aspect of your business, from financial records to regulatory compliance. Many deals face challenges here if the initial preparation was not thorough. The process concludes with the final legal negotiations and the closing of the transaction.
Valuation: What Is Your Practice Really Worth?
Sellers often wonder what their practice is worth. They may have heard of rules of thumb based on revenue. The truth is, sophisticated buyers do not use them. They value your practice based on its true profitability, or Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
At SovDoc, we use a private-equity-grade approach to determine this figure. We start with your stated net income and add back expenses that a new owner would not incur, like your personal car lease or an above-market salary. This shows the true cash flow of the business.
Here is a simplified example:
| Financial Item | Amount | Explanation |
|---|---|---|
| Reported Net Income | $250,000 |
The profit shown on your financial statements. |
| Add: Owner Salary (above market) | +$75,000 |
Adjusting the owner’s pay to a fair market rate. |
| Add: One-Time/Personal Expenses | +$25,000 |
Adding back non-recurring business costs. |
| Adjusted EBITDA | $350,000 |
The true cash flow a buyer evaluates. |
This Adjusted EBITDA is then multiplied by a “multiple” (e.g., 4x, 6x) that reflects your practice’s size, growth rate, and risk profile. This process often reveals that a practice is worth significantly more than the owner thought.
Life After the Sale: Planning for the Transition
Your legacy extends beyond the closing table. A successful transition ensures the continued care of your patients and the stability of your dedicated staff. This phase should be planned for during the sale negotiations, not after.
You may be asked to stay on for a transition period to ensure a smooth handover. It is also when key components of your deal structure, like an earnout, come into play. An earnout is additional compensation you receive if the practice hits certain performance targets after the sale. Some deals may also involve you “rolling over” a portion of your equity, making you a minority partner in the new, larger entity. These structures can be financially rewarding, but they require careful negotiation to align with your personal goals and protect your interests.
Frequently Asked Questions
What is the market outlook for physical therapy practices in New Hampshire?
The market for physical therapy in New Hampshire is growing and expected to reach nearly $200 million by 2025, reflecting strong local demand and an active market that attracts buyers seeking established practices.
How should I prepare my physical therapy practice for sale in New Hampshire?
Preparation should begin 2-3 years in advance and focus on personal and operational readiness, such as addressing lease terms and financial health, as well as ensuring 3-5 years of clean financial statements, up-to-date corporate records, and clear contracts to facilitate buyer due diligence.
Who are the typical buyers of physical therapy practices in New Hampshire?
Buyers include strategic acquirers like larger regional or national groups, private equity-backed platforms seeking financial efficiencies, and local or regional multi-location competitors who understand the local market.
How is the value of a physical therapy practice determined in New Hampshire?
Value is based on Adjusted EBITDA, which starts with the net income and adds back expenses not incurred by a new owner. This true cash flow is then multiplied by a factor reflecting size, growth, and risk, often resulting in a higher valuation than simple revenue-based rules of thumb.
What should I expect during the transition period after selling my practice?
You may be asked to stay on temporarily to ensure a smooth handover of patient care and staff stability. Deal structures might include earnouts based on performance targets or rolling over equity to remain a minority partner, requiring careful negotiation to align with your goals.
