Selling your neurology practice is one of the most significant financial decisions of your career. In North Carolina, this path has its own set of rules and opportunities. This guide is designed to give you a clear overview of the landscape, from understanding your practice’s market value to navigating the state’s specific legal requirements. We will walk you through the key factors you need to consider for a successful and profitable transition.
Market Overview
The market for neurology practices in North Carolina is active. Buyer interest is strong from both traditional and new sources, creating a competitive environment for well-run practices. With neurologist compensation in the state often ranging from the low-$200s to over $400,000, sophisticated buyers recognize the financial potential of a strong neurology group.
A Landscape of Opportunity
Hospitals and large health systems continue to acquire specialty practices to expand their service lines and secure referral networks. At the same time, private equity firms are increasingly interested in the neurology space. They seek to partner with successful practices to build larger platforms, though their approach in North Carolina must be carefully structured.
The North Carolina Factor
This market activity is shaped by North Carolina s Corporate Practice of Medicine (CPOM) doctrine. These laws dictate who can own a medical practice, adding a layer of complexity that doesn t exist in many other states. Understanding this single factor is critical to exploring your options.
Key Considerations
Before you can determine a price or find a buyer, you must understand North Carolina s specific legal framework. The state s CPOM laws are some of the strictest in the country. They generally require that a medical practice be owned by a physician licensed in North Carolina. This has major implications for potential buyers, particularly private equity firms or out-of-state corporate entities. Furthermore, any change in the ownership of your professional corporation or LLC requires prior approval from the North Carolina Medical Board. Navigating this approval process is a mandatory step. These are not just administrative details; they are foundational rules that will define the structure of your sale.
Market Activity
You will not find a public database of recent neurology practice sales in North Carolina. This information is almost always kept private under strict confidentiality agreements. However, the market is far from quiet. We see consistent activity from two main groups of buyers.
A Confidential Market
Because sales data isn’t public, it’s difficult to know what your practice is worth without access to proprietary information from recent transactions. Offers that come directly to you are rarely the best offers. The only way to ensure you receive a premium valuation is by creating a competitive process with multiple qualified buyers.
The Primary Buyers
The main buyers in North Carolina fall into two categories. First are the local and regional health systems. They are known entities but often have rigid acquisition formulas. Second are physician-owned platforms, many of which are backed by private equity. They use compliant legal structures to partner with practices, often offering more flexibility and financial upside.
The Sale Process
A successful practice sale follows a structured, confidential process designed to protect your interests and maximize value. It begins with Preparation, where you organize your financial and operational documents to present a clean, compelling story. This is followed by a comprehensive Valuation to establish a credible asking price. Next, we run a confidential Marketing process, approaching a curated list of qualified buyers. Once offers are received, the most critical phase begins: Due Diligence. This is an intense review where the buyer verifies everything about your practice. Many sales encounter issues here. The final stage involves Negotiating the definitive agreements and moving toward a successful Closing.
Valuation
What is your neurology practice worth? It is more than just a multiple of your annual revenue. Sophisticated buyers base their valuation on a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice s true cash flow after normalizing for owner-specific expenses and other one-time costs. That Adjusted EBITDA figure is then multiplied by a number that reflects your practice s quality and risk profile.
| Factor that Boosts Your Multiple | Why It Matters to a Buyer |
|---|---|
| Multiple Providers | Reduces reliance on a single owner, lowering risk. |
| Strong Referral Network | Shows a stable, predictable source of new patients. |
| Modern Equipment & Tech | Lowers the buyer’s need for immediate capital investment. |
| Ancillary Services (e.g., EEG, EMG) | Creates diverse and high-margin revenue streams. |
A comprehensive valuation is the foundation of a successful exit strategy. It ensures you go to market with a credible and defensible price.
Post-Sale Considerations
The work is not over once the sale agreement is signed. A successful transition requires careful planning for what comes next. Your role after the sale is a key point of negotiation. You will need a plan for communicating the change to your loyal staff to ensure continuity of care and retention of key team members. A smooth handover of patient relationships and records is also critical to protecting your legacy. Finally, the structure of your deal has massive implications for your after-tax proceeds. Planning for this from the start can be the difference between a good outcome and a great one. Thinking through these elements ensures your transition is as successful as your years in practice.
Frequently Asked Questions
What is the market environment like for selling a neurology practice in North Carolina?
The market for neurology practices in North Carolina is active, with strong buyer interest from hospitals, large health systems, and private equity firms. These buyers are attracted by the financial potential of successful neurology groups, creating a competitive environment for well-run practices.
What legal considerations must be addressed when selling a neurology practice in North Carolina?
North Carolina has strict Corporate Practice of Medicine (CPOM) laws that generally require medical practices to be owned by licensed physicians in the state. This means private equity firms and out-of-state corporations face challenges in ownership. Additionally, ownership changes must get prior approval from the North Carolina Medical Board, making legal compliance a critical step.
Who are the primary buyers of neurology practices in North Carolina?
The primary buyers include local and regional health systems, which have established but often rigid acquisition policies, and physician-owned platforms, many supported by private equity, offering more flexible and financially incentivizing deals through compliant legal structures.
How is the valuation of a neurology practice determined in North Carolina?
Valuation is based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which reflects the practice’s true cash flow after normalization. Buyers then multiply this figure by a factor depending on the practice’s quality and risk profile. Factors that can boost valuation include multiple providers, strong referral networks, modern equipment, and ancillary services like EEG and EMG.
What post-sale considerations should sellers plan for when transitioning their neurology practice?
Post-sale planning should address communication with staff to ensure continuity and retention, smooth transfer of patient relationships and records to protect the legacy, and careful structuring of the sale to optimize after-tax proceeds. These steps are essential for a successful transition and financial outcome.
