Guide to Selling a Oncology Practice in Texas

The market for oncology practices in Texas is more active than ever. Increased investment from private equity and large healthcare systems presents a significant opportunity for practice owners like you. However, navigating a sale involves more than finding a buyer. It requires a deep understanding of practice valuation, complex Texas regulations like CPOM, and a strategy to protect your legacy. This guide provides a clear overview to help you understand the landscape and prepare for a successful transition.

Market Overview: The Texas Oncology Landscape

Selling an oncology practice in Texas today means engaging with a dynamic and competitive market. Understanding the key players and trends is the first step toward a successful outcome. The current environment is defined by major investor interest and a unique local market.

A Magnet for Investment

Large-scale investment is reshaping the oncology field. Private equity firms and corporate health systems see the value in well-run oncology practices and are actively acquiring them. This trend is driving competitive valuations. Transactions like TPG and AmerisourceBergens acquisition of OneOncology show a clear appetite for consolidating practices into larger platforms. For an independent practice owner, this creates a seller s market, but also a more complex deal environment.

Navigating the Local Terrain

In Texas, you cannot ignore the presence of major players like Texas Oncology. Their scale influences everything from referral patterns to payer negotiations. A potential sale must be positioned correctly within this landscape. Your practice’s specific location, patient demographics, and referral network are critical assets that sophisticated buyers will analyze against the backdrop of these established groups.

Three Key Considerations Before You Sell

Thinking about a sale involves more than just a price. For oncology practice owners in Texas, a few specific areas demand early attention. Addressing these points, often years in advance, is how you move from an average valuation to a premium one.

1. Texas Regulatory Compliance. The state s Corporate Practice of Medicine (CPOM) laws are strict. They dictate who can own a medical practice and employ physicians. A buyer will scrutinize your structure for full compliance. Any issues here can derail a transaction during due diligence. It is important to have your legal house in order from the start.

2. Financial Clarity. Buyers value predictable cash flow. They look at your Adjusted EBITDA, not just your revenue. This metric normalizes for any personal expenses run through the practice or above-market owner salaries. Presenting a clean, clear financial story supported by data is one of the most powerful things you can do to increase your practice’s value.

3. Your Transition Plan. What happens to your patients and staff? A clear plan for continuity of care and staff retention is not just a selling point. It is a core part of protecting your legacy. Buyers look for stable operations that will continue after you transition out.

Market Activity and Recent Trends

The theory of a strong market is proven by real activity. Across Texas, oncology practices are engaging in transactions that go beyond simple sales. We see practices selling majority interests to larger groups like Cancer Treatment Centers of America, a path taken by Choice Cancer Care. We also see strategic partnerships forming, like the one between Canopy and Texas Oncology, aimed at improving clinical outcomes. Even the real estate housing cancer centers is a hot commodity, as seen with the sale of the Texas Oncology facility in Bastrop. This activity shows a healthy, multi-faceted market where owners have various options to realize the value they have built. It is not just about selling. It is about finding the right strategic move for your specific goals.

Understanding the Sale Process

A practice sale is a structured process that typically takes between six and twelve months. Each phase has its own purpose and potential pitfalls. Many owners are surprised by the rigor involved, especially during due diligence. Knowing the roadmap helps you prepare for the journey and avoid costly delays or surprises. A well-managed process protects your confidentiality and creates the competitive tension needed to maximize your final offer.

How Your Practice is Valued

One of the first questions every owner asks is, “What is my practice worth?” The answer is more complex than a simple rule of thumb. While industry multiples get a lot of attention, your practice s true value is determined by its profitability, risk profile, and growth story. It’s a combination of objective math and subjective narrative.

The Key Metric: Adjusted EBITDA

Sophisticated buyers start with one number: Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow. It is calculated by taking your net income and adding back owner-specific or one-time expenses. Getting this number right is the foundation of any credible valuation. Most practices are undervalued until their EBITDA is properly normalized.

More Than a Multiple

The Adjusted EBITDA is then multiplied by a number the multiple to arrive at a valuation. This multiple is not fixed. It changes based on several factors. A practice with multiple providers and strong growth potential will receive a higher multiple than a practice entirely dependent on a single owner. We help you build the story around these factors to justify the highest possible multiple.

After the Sale: Planning for Your Next Chapter

The day you sign the closing documents is not the end of the journey. It is the beginning of a new one. The structure of your deal has major implications for what comes next. How the sale is structured can dramatically affect your after-tax proceeds. Smart planning is required to ensure you keep as much of your hard-earned money as possible. Beyond the financials, there is your legacy. A successful transition ensures that the staff who helped you build the practice are secure and that your patients continue to receive excellent care. This continuity does not happen by accident. It is the result of careful negotiation and a transition plan designed to protect what you built.