Selling your Sports Medicine & Performance Therapy practice is a major decision. In Buffalo, the market for these specialized practices is strong, driven by national growth and local demand. This guide provides insight into the Buffalo market, what buyers look for, and how to navigate the complexities of a sale. Properly preparing for this process is the key to protecting your legacy and maximizing your financial outcome.
Curious about what your practice might be worth in today’s market?
Market Overview
The timing of your practice sale can significantly impact your outcome. Today, the conditions for selling a Sports Medicine and Performance Therapy practice are favorable, both nationally and here in Buffalo.
National Tailwinds
The U.S. sports medicine market is on a strong growth path, projected to grow from $2.18 billion in 2023 to over $3.64 billion by 2030. This growth attracts sophisticated investors, including private equity firms and large healthcare systems, who are actively looking to acquire well-run practices. They see the value in the active and aging populations who rely on your services.
The Buffalo Landscape
This national trend is visible right here in Western New York. The local market is dynamic, with established players like UBMD Orthopaedics & Sports Medicine expanding their footprint. This activity shows that Buffalo is a competitive and valuable region for sports medicine services. For independent practice owners, this means there is a ready pool of potential buyers looking for opportunities.
Key Considerations
A successful sale is about more than the final number. It’s about securing your legacy. As you consider selling, your thoughts likely turn to the people who depend on you. We find that most owners want answers to three key questions.
- What happens to my patients? You have built trust and delivered excellent care for years. The right deal structure ensures your patients continue to receive high-quality service, protecting the reputation you built.
- What happens to my staff? Your team is a critical part of your practice’s success and value. Planning for their future, whether through continued employment or transition support, is a key part of the negotiation process.
- What is my role after the sale? Do you want to continue practicing for a few years, or are you ready to retire immediately? Your transition plan should be designed around your personal goals, not dictated by the buyer.
The right exit approach depends on your personal and financial objectives.
Market Activity
The buyers active in the Buffalo market today are not just local physicians looking to expand. The primary driver of acquisitions is consolidation, led by two main groups: private equity investors and larger strategic health systems.
These are professional buyers. They do not value a practice based on revenue alone. They analyze your business through a financial lens, focusing on a key metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow and profitability.
Understanding your Adjusted EBITDA is the first step to understanding what your practice is truly worth to these buyers. Preparing your financials to clearly demonstrate this value is critical before you ever enter a conversation. A clean financial story can significantly increase your valuation.
The Sale Process
A successful practice sale is not an accident. It is the result of a structured, confidential process designed to create a competitive environment and achieve the best possible terms. The process generally moves through four distinct phases, each with its own challenges.
| Phase | Key Challenge |
|---|---|
| 1. Preparation | Gathering and organizing years of financial, legal, and operational documents into a clean, professional package. |
| 2. Valuation | Moving beyond “rules of thumb” to build a defensible valuation based on Adjusted EBITDA and market data. |
| 3. Marketing | Confidentially approaching a curated list of qualified buyers without alerting staff, patients, or competitors. |
| 4. Due Diligence | Surviving a deep, detailed review of your entire practice where un-prepared sellers often see deals fall apart. |
Preparing properly for buyer due diligence can prevent unexpected issues.
Valuation
So, what is your practice worth? The answer is more science than art. Sophisticated buyers use a straightforward formula: Adjusted EBITDA x Valuation Multiple.
Adjusted EBITDA is your practice’s normalized annual profit. We calculate it by taking your reported net income and adding back interest, taxes, depreciation, amortization, and any owner-specific personal expenses or non-recurring costs. It shows the true earning power of the business.
The Valuation Multiple is a number that reflects the attractiveness and risk of those earnings. A larger, multi-provider practice with strong growth in a market like Buffalo will receive a higher multiple than a smaller practice reliant on a single owner. For practices with over $1M in EBITDA, multiples in the current market often range from 5.5x to 7.5x, or even higher for exceptional platforms.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Post-Sale Considerations
Signing the purchase agreement is a milestone, not the finish line. A well-designed transaction considers what happens on day one after the sale and beyond. Planning for this phase is critical to ensuring the deal meets your long-term personal and financial goals.
Here are three keys to a successful transition.
- Your Financial Outcome. How the deal is structured has a massive impact on your after-tax proceeds. Planning for taxes should happen long before the close, not after.
- Your Future Role. Many deals include a transition period for the selling owner. Some owners take the opportunity to roll a portion of their sale proceeds into the new, larger company (an “equity rollover”), giving them a second financial win when that company is sold again.
- Your Team’s Future. A smooth transition depends on your staff. Ensuring they understand their roles and feel secure under new ownership protects the value of the practice you just sold and is crucial for continuity of care.
The structure of your practice sale has major implications for your after-tax proceeds.
Frequently Asked Questions
What is the current market outlook for selling a Sports Medicine & Performance Therapy practice in Buffalo, NY?
The market for selling these practices in Buffalo is favorable, driven by strong national growth and local demand. Buffalo’s market is competitive with active buyers including private equity and larger healthcare systems expanding their presence.
What key financial metric do buyers focus on when valuing a Sports Medicine practice?
Buyers primarily evaluate the practice based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which reflects the true cash flow and profitability of the business. This metric is crucial for determining the practice’s value.
What are important considerations regarding patients and staff when selling a Sports Medicine practice?
Most owners want to ensure patients continue receiving high-quality care to protect the practice’s reputation. Planning for staff is also critical, including opportunities for continued employment or transition support to maintain service continuity and staff morale.
What are the typical phases involved in the practice sale process in Buffalo?
The process generally includes four phases: Preparation (organizing financial and legal documents), Valuation (defensible financial valuation), Marketing (confidentially reaching qualified buyers), and Due Diligence (comprehensive review of the practice). Proper preparation for each phase maximizes the sale outcome.
How can a selling owner plan their role and financial outcome after the sale?
Owners can participate in transition periods, sometimes continuing to practice or rolling proceeds into an equity position in the acquiring company. Early planning for tax-efficient deal structures can significantly enhance after-tax proceeds, supporting both personal and financial goals post-sale.
