The market for fertility practices is experiencing unprecedented growth, making it a prime time for Nashville-based owners to consider their transition options. Selling your practice is one of the most significant financial decisions you will ever make. This guide provides a clear overview of the market, buyer expectations, and the key steps involved in navigating a successful sale. Proper preparation is the key to maximizing your practice’s value and securing your legacy.
Market Overview
You are operating in a remarkably strong market. The U.S. fertility services sector was valued at $8.9 billion in 2023 and is on a steep growth trajectory, projected to nearly double to $16.8 billion by 2028. This national boom is fueled by increasing demand and technological advancements, creating a very active buyer landscape.
In Nashville, this trend is amplified by the city’s growth and strong medical reputation. Buyers are not just looking for any practice. They are seeking high-performing clinics with strong success rates, like those seen in Nashville that meet or exceed national SART averages. For practice owners, this translates to significant opportunity. The question is not whether buyers are interested, but how to best position your practice to attract the right buyer.
Key Considerations for Nashville Sellers
Sophisticated buyers, especially private equity groups, look beyond the top-line revenue. They perform deep due diligence to understand the quality and sustainability of the practice. Getting ahead of their questions is critical.
Clinical and Operational Strength
Your clinics value is directly tied to its reputation and results. Buyers will scrutinize your success rates against SART national data and verify that your lab holds key accreditations, such as from the College of American Pathologists (CAP). The stability and expertise of your embryology staff and physicians are also a major focus. A practice that can demonstrate operational excellence and superior patient outcomes is a premium asset.
Tennessee Legal & Compliance
Buyers will also assess your legal and corporate structure. It is important to remember that Tennessee has specific laws regarding who can own a medical practice. Navigating these regulations during a transaction is a complex process. Ensuring your corporate records, compliance programs, and contracts are in order before going to market prevents delays and protects your value.
Market Activity
The fertility and IVF space is a hotbed of investment. The most active buyers today are private equity (PE) firms and their large, multi-state strategic platforms. We are not talking about a local physician looking to take over your lease. These are sophisticated financial buyers who are consolidating successful clinics to build national networks. You may have seen this with major deals like Ovation Fertility being acquired by US Fertility.
This activity is great news for sellers. It creates a competitive environment that can drive valuations to premium levels. However, it also means you will likely be negotiating with a team of experienced dealmakers. Understanding their model and what they look for is the key to leveraging this trend. They often seek partnerships, not just outright takeovers, allowing physicians to take chips off the table while continuing to lead clinically.
The Sale Process
Selling a practice is a structured process, not a single event. While every deal is unique, the journey typically follows four main phases. Knowing these steps helps you prepare for what is ahead.
- Preparation and Valuation. This is the foundational stage where we help you understand your practice’s true market value. This involves normalizing your financials to calculate an accurate Adjusted EBITDA and packaging your practices story for buyers.
- Marketing to Buyers. We identify and confidentially approach a curated list of the most likely strategic and financial buyers. This is a controlled process designed to create competitive tension and maximize your negotiating leverage.
- Due Diligence and Negotiation. The top buyer candidates will conduct a deep dive into your financials, operations, and legal standing. This is the most intensive phase, where strong preparation pays off. We manage this process to protect you and negotiate the key terms of the deal.
- Closing. The final stage involves legal documentation, such as the asset purchase agreement, and managing the transition to the new ownership.
Understanding Your Practice’s Value
How is a fertility practice valued? It is not based on revenue or the value of your equipment alone. The core of modern practice valuation lies in a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Think of it as your practices true cash flow, after “normalizing” for owner-specific expenses or one-time costs. We find that most owners are surprised by how much higher their Adjusted EBITDA is compared to their reported net income.
This Adjusted EBITDA figure is then multiplied by a market “multiple” to determine the enterprise value. That multiple is not a fixed number. It increases based on factors like having multiple providers (less reliance on one owner), a diverse range of services, strong growth, and of course, a Nashville location. A comprehensive valuation is the foundation of any successful exit strategy.
Planning for Life After the Sale
A successful transaction is not just about the sale price. It is also about structuring the deal to protect your future and your legacy. The decisions made during negotiations have long-term consequences, so it is important to plan ahead.
| Consideration | Why It Matters for You |
|---|---|
| Sale Structure | An asset sale versus an entity sale has major implications for your final after-tax proceeds. The right structure can save you a significant amount in taxes. |
| Your Future Role | If you plan to continue working, your employment agreement is a critical document. It defines your compensation, responsibilities, and clinical autonomy post-sale. |
| Non-Compete Clauses | These are standard in most deals. Negotiating fair terms is vital to ensure you have the freedom you desire after you fully transition out of the practice. |
| Protecting Your Staff | A key part of your legacy is your team. A well-structured deal can ensure a smooth transition for your valued employees. |
Thinking through these elements from the beginning ensures the final deal aligns with your personal, financial, and professional goals.
Frequently Asked Questions
What is the current market outlook for selling a Fertility & IVF practice in Nashville, TN?
The market for fertility practices is growing rapidly both nationally and in Nashville. The U.S. fertility services sector is projected to nearly double from $8.9 billion in 2023 to $16.8 billion by 2028. Nashville’s strong medical reputation and growth amplify this trend, making it a favorable environment for selling fertility practices.
What key factors do buyers look for when purchasing a Fertility & IVF practice in Nashville?
Buyers, especially private equity groups, look for practices with strong clinical and operational performance. This includes high success rates that meet or exceed national SART averages, lab accreditations like the College of American Pathologists (CAP), and a stable, expert embryology and physician team. They also assess legal and compliance standing, particularly following Tennessee regulations on medical practice ownership.
How is the value of a Fertility & IVF practice determined for sale?
Practice valuation is primarily based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which reflects the true normalized cash flow of the practice. This figure is multiplied by a market multiple that varies depending on factors like having multiple providers, a diverse service range, strong growth, and the location in Nashville.
What are the main phases involved in selling a Fertility & IVF practice in Nashville?
The sale process typically includes four main phases: 1) Preparation and Valuation to understand market value; 2) Marketing to Buyers with a curated approach; 3) Due Diligence and Negotiation involving financial and legal review; and 4) Closing, where the legal sale is finalized and ownership transitions.
How should physician-owners plan for their future after selling their Fertility & IVF practice?
Owners should consider the sale structure, which affects after-tax proceeds, their future role with employment agreements outlining compensation and responsibilities, negotiate fair non-compete clauses, and plan to protect their staff for a smooth transition. These considerations ensure the sale aligns with personal, financial, and professional goals to preserve their legacy.