Guide to Selling a Sports Medicine & Performance Therapy Practice in Alabama

The market for Sports Medicine & Performance Therapy practices in Alabama is strong, presenting a significant opportunity for practice owners considering their next move. Selling your practice is a major financial and personal decision. This guide provides key insights into the Alabama market, valuation drivers, and the sale process to help you navigate the path from consideration to a successful closing. Proper preparation is the key to maximizing your practice’s value.

A Growing and Active Market

If you are considering selling, the timing is favorable. The market for physical therapy and specialized services like sports medicine is experiencing robust growth, driven by an active population and increasing awareness of performance-based care.

National Momentum

Across the United States, the physical therapy market is on a steady upward trajectory. Valued at nearly $50 billion, it is projected to exceed $61 billion by 2030. This growth is supported by demographic trends and a projected 14% increase in the employment of physical therapists over the next decade, a rate much faster than the average for all occupations. This signals a strong, sustained demand for practices like yours.

The Alabama Opportunity

This national trend is clearly reflected in our state. The physical therapy sector in Alabama is a significant part of the healthcare economy, with revenues expected to approach $740 million. We see this firsthand in the market activity. There is a clear appetite from buyers, including larger health systems and private equity groups, who are looking to expand their footprint in a growing state. For an independent practice owner, this translates into a competitive environment where well-run practices are highly sought after.

What Buyers Look for in a Practice

A strong market is a great start. But a buyer’s final decision comes down to the specific strengths of your practice. When we prepare a practice for sale, we help owners focus on the key areas that attract premium offers.

Here are a few things sophisticated buyers will analyze:

1. Your Service Mix. A practice that offers a blend of traditional sports medicine, performance therapy, cash-pay wellness services, and rehabilitation has diverse revenue streams. This is less risky and more attractive than a practice reliant on a single service.
2. Referral Sources. Are your patient referrals concentrated with one or two orthopedic groups, or do you have a broad base of referrers? Diversified and consistent referral patterns demonstrate stability and a strong community reputation.
3. Staff and Operations. Buyers look for a qualified and loyal team that can ensure a smooth transition. A practice with well-documented operational procedures and efficient billing is seen as a well-managed asset that can be easily integrated.
4. Patient Demographics. Your patient base is a key asset. A practice serving a mix of high school athletes, active adults, and “weekend warriors” has a wider growth potential than one with a very narrow focus. Documenting this helps tell your practice’s story.

Consolidation and Confidential Deals

The high level of interest in the Alabama market is driving significant activity. Understanding these dynamics is important as you consider your own timing and strategy.

Strategic Buyers are Active

You may have seen announcements of larger healthcare organizations acquiring or affiliating with local clinics, like the recent partnership between Infirmary Therapy Services and Fleming Rehab and Sports Medicine. This is a clear indicator that strategic buyers are actively investing in the Alabama therapy market. They are looking for well-established practices to expand their service lines and geographic reach. This activity creates a competitive environment for sellers.

Most Transactions are Private

Unlike real estate, the sale of a private medical practice is rarely public knowledge. The final sale price and terms are kept confidential. This means you cannot simply look up “comps” to see what a practice like yours sold for. The only way to truly understand the market is to be in it. This is why working with an advisor who manages these deals consistently provides a significant advantage. We know who the active buyers are, what they are paying, and what deal structures they prefer.

Navigating the Path to a Sale

A successful practice sale does not happen by accident. It follows a structured process designed to protect your interests and maximize the outcome. While every deal is unique, the journey generally follows a clear path. Most owners find that starting the preparation 12 to 24 months before they want to sell yields the best results.

Here is a simplified look at the major stages:

1. Valuation and Preparation. This initial phase involves a deep analysis of your financials, operations, and market position to determine a realistic valuation range. It is also when we identify and fix any issues that could lower your value.
2. Marketing the Practice. We prepare a Confidential Information Memorandum (CIM) that tells your practice’s story to potential buyers. We then contact a curated list of qualified buyers without revealing your practice’s identity.
3. Managing Offers. As offers come in, we help you compare them not just on price, but also on structure, terms, and the buyer’s fit with your goals for your staff and legacy.
4. Due Diligence. Once you accept an offer, the buyer will conduct a thorough review of your financials, legal documents, and operations. This is the stage where many deals fall apart due to poor preparation. Our job is to manage this process smoothly.
5. Closing. After a definitive purchase agreement is signed, the final steps are taken to legally transfer the practice assets and funds.

Understanding Your Practice’s True Worth

Practice owners often hear that a practice sells for a multiple of its annual revenue. While that is a simple benchmark, it is not how sophisticated buyers determine their offers. They focus on a more important metric: Adjusted EBITDA.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a practice s core profitability. We then “adjust” this number by adding back owner-specific expenses like an above-market salary, a personal vehicle, or other one-time costs. This reveals the true cash flow available to a new owner and is the foundation for your valuation. A higher Adjusted EBITDA leads directly to a higher purchase price. The final value is determined by multiplying this number by a factor that reflects your practice’s quality and risk profile.

Planning for Life After the Sale

A successful transaction is not just about the price. It is also about setting up a smooth transition for your patients, your staff, and yourself. The best deals are structured with the future in mind, and these points should be negotiated long before you close.

Your Role and Your Legacy

Many owners worry about losing control. But a sale does not have to be an all-or-nothing event. Deals can be structured to keep you involved clinically for a set period. Some owners even choose to “roll over” a portion of their equity into the new, larger company. This allows you to take some chips off the table now while participating in the future growth of the platform.

Ensuring a Smooth Transition

Your staff and patients are the heart of your practice. A key part of any negotiation is defining the transition plan. This includes communicating the change, ensuring continuity of care, and securing the future for your key team members. Buyers know a practice’s value is tied to its people, so they are typically motivated to retain your staff.

Tax-Efficient Structures

Finally, how your deal is structured has massive implications for your net proceeds. An Asset Sale versus an Entity Sale can result in a difference of hundreds of thousands of dollars in taxes. Planning for the most tax-efficient structure from the very beginning is one of the most important services we provide. It ensures you keep more of your hard-earned value.