The Washington market for sports medicine and performance therapy is active. Selling your practice is a major decision that involves more than just finding a buyer. Understanding current market value, buyer interest, and the steps in the sale process is key to a successful outcome. This guide offers a clear overview of what you should know as you consider this important transition for your practice.
Curious about what your practice might be worth in today’s market?
Market Overview
If you own a sports medicine or performance therapy practice in Washington, you are in a strong position. The demand for your services is high and expected to continue growing, both locally and nationally. This creates a very favorable environment for practice owners considering a sale.
Strength in Washington State
The market right here at home is robust. Projections show the Physical Therapists industry in Washington growing to $1.2 billion. Employment in the field is expected to increase by 14% over the next decade. This is much faster than the average for other occupations. It signals a sustained, high demand for quality therapy services across the state.
A National Trend of Growth
This local strength is part of a larger trend. The U.S. physical therapy market is set to nearly triple in the next decade, while the global sports medicine market is projected to more than double. An aging population, combined with a greater focus on injury prevention and performance, is fueling this expansion. For practice owners, this widespread growth means more potential buyers and stronger valuations.
Key Considerations
Selling a medical practice in Washington involves more than a simple handshake. You will need to navigate state-specific rules. The Washington State Medical Association (WSMA), for example, has guidelines on how practice assets can be sold to other physicians. You also need to be aware of the state’s efforts to formalize rules around the corporate practice of medicine, which could affect who can buy your practice.
Furthermore, for many healthcare transactions, the state requires advance written notice before the sale can close. Failing to comply can cause serious delays or even jeopardize the deal. Making sure your sale is structured correctly and all notices are filed properly is a detailed process. It’s an area where having an expert guide you can prevent major headaches.
Every practice sale has unique considerations that require personalized guidance.
Market Activity
The favorable market conditions have attracted a new type of buyer. Private equity firms and other large strategic partners are increasingly active in acquiring practices, especially in related fields like orthopedics. This trend has been growing for over a decade. For a Sports Medicine & Performance Therapy practice owner in Washington, this means a few things.
- Higher Potential Valuations. Competition among well-capitalized buyers can drive up the price for sought-after practices. These buyers are often looking for well-run practices to use as a “platform” for future growth.
- A More Complex Process. These are sophisticated buyers. They conduct deep financial and operational due diligence. Being prepared with clean financials and a clear growth story is not just a suggestion, it is a requirement.
- New Partnership Structures. A sale to a larger group does not always mean walking away. These deals often involve the physician owner retaining some equity. This allows you to benefit from the future growth of the larger company.
Timing your practice sale correctly can be the difference between average and premium valuations.
The Sale Process
Selling your practice follows a structured path. The first step, and one many owners start 1-2 years in advance, is preparation. This means getting your financial statements and operational documents in order. Next comes a professional valuation to understand what your practice is worth in the current market. Once you have a price, the marketing phase begins. This is done confidentially to protect your relationships with staff, patients, and referral sources. After a suitable buyer is found and an initial offer is made, you enter the due diligence phase. This is where the buyer verifies everything about your practice. It is often the most intense part of the sale. With diligence complete, the final legal documents are drafted, and the transaction is closed.
The due diligence process is where many practice sales encounter unexpected challenges.
How Your Practice is Valued
So, what is your practice actually worth? Buyers don’t just look at your reported profit. They start with a number called Adjusted EBITDA. Think of it as your practice’s true cash flow. We find it by taking your net income and adding back interest, taxes, depreciation, and amortization. Then, we “normalize” it by adjusting for any non-business expenses or owner perks. This gives a clear picture of the practice’s profitability.
That Adjusted EBITDA figure is then multiplied by a number called a “multiple.” For practices like yours, this multiple can range from 4x to 8x, or even higher. Where your practice falls in that range depends on several factors.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | Relies heavily on the owner | Associate-driven with multiple practitioners |
| Services | Standard physical therapy | Specialized services, cash-pay options |
| Technology | Paper charts, older equipment | Modern EMR, advanced therapy tech |
| Referral Sources | A few key sources | Diverse and established referral network |
Getting an accurate valuation is the first step toward a successful sale. It is the foundation of your entire strategy.
A comprehensive valuation is the foundation of a successful practice transition strategy.
After the Sale
The day the deal closes is not the end of the story. A well-planned transition is important for your staff, your patients, and your own peace of mind. This often involves the selling doctor staying on for a period of time to ensure a smooth handover. It is also where your legacy is protected. You want to see the practice you built continue to thrive under new ownership. With a private equity or strategic partner, your role may evolve. Many deals are structured so that you “roll over” a portion of your sale proceeds into equity in the new, larger company. This gives you a stake in the future success and a potential second financial gain when that larger entity is eventually sold. Planning for this next chapter is just as important as planning for the sale itself.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What is the current market outlook for selling a Sports Medicine & Performance Therapy practice in Washington?
The market in Washington for sports medicine and performance therapy is very active and favorable. The state’s Physical Therapists industry is projected to grow to $1.2 billion, with employment expected to increase by 14% over the next decade. This high demand creates a strong position for practice owners considering a sale.
What state-specific rules should I be aware of when selling my practice in Washington?
When selling your practice in Washington, you must navigate state-specific rules including guidelines from the Washington State Medical Association (WSMA) about selling practice assets to other physicians. Additionally, Washington is working to formalize rules regarding the corporate practice of medicine which could impact who can purchase your practice. Also, advance written notice is required before sale closure to avoid delays or deal jeopardy.
How is the value of my Sports Medicine & Performance Therapy practice determined?
Practice value is primarily based on Adjusted EBITDA, which reflects the practice’s true cash flow after adjusting for non-business expenses and owner perks. This figure is multiplied by a multiple typically ranging from 4x to 8x or higher. Factors influencing the multiple include provider model, range of services, technology used, and diversity of referral sources.
Who are typical buyers of these practices in Washington, and how does that affect the sale?
The market has attracted private equity firms and large strategic partners in related fields like orthopedics. These buyers often offer higher potential valuations due to competition but also involve a more complex and rigorous due diligence process. Sales may include partnership structures allowing the seller to retain equity and benefit from future growth.
What should I expect in the sale process of my practice?
The sale process usually begins 1-2 years in advance with preparation including financial and operational organization, followed by a professional valuation. Then comes a confidential marketing phase, buyer selection, and a due diligence phase which can be the most intense. After due diligence, legal documents are drafted, and the transaction is closed. Post-sale transition planning is crucial for staff, patients, and protecting your legacy.
