Selling your Neurological Rehabilitation practice is a significant decision. You have built a valuable asset that serves a critical patient need in Oregon. The current market presents a strong opportunity, driven by growing demand and an aging population. However, navigating the sale involves unique challenges, from state-specific regulations to complex valuation models. This guide provides a clear overview to help you understand the landscape and prepare for a successful transition.
Curious what your practice might be worth in today’s market?
Market Overview
The market for neurological rehabilitation in Oregon is strong and poised for more growth. The broader physical therapy industry in the state is projected to become a nearly $700 million market soon. For you, this a positive signal from the market. This demand is not just a projection. It’s a reality on the ground.
A Growing Need
Oregon is currently facing a shortage of rehabilitation beds for brain injury patients. This indicates a high, unmet demand for the specialized services your practice provides. Patients need your expertise. This supply and demand imbalance creates a favorable environment for practice owners considering a sale. Buyers are actively looking for established practices with a solid reputation to meet this growing need.
Key Patient Demographics
While physical therapists in Oregon dedicate over 5% of their time to neurology, there is significant overlap with geriatrics and orthopedics. This means your potential patient base is broad and growing as Oregon’s population ages. A practice that can demonstrate successful outcomes with this demographic is in a powerful position.
The window of opportunity for optimal valuations shifts with market conditions.
Key Considerations
Selling a medical practice in Oregon is not like selling in other states. The states Corporate Practice of Medicine (CPOM) laws are a major factor in any transaction. These regulations generally require that physicians maintain at least 51% ownership of a medical practice. This rule shapes the entire deal structure and significantly limits the pool of potential buyers, often ruling out certain corporate acquirers. Beyond this legal hurdle, you must also consider the strength of your referral networks and the stability of your specialized clinical team. These elements are just as critical to a buyer as your financial statements.
Every practice sale has unique considerations that require personalized guidance.
Market Activity
Despite Oregons regulatory complexities, the market is active. We see consistent interest from buyers who understand how to operate within the state’s legal framework. These are often sophisticated physician groups or private equity-backed platforms that use compliant partnership models. These buyers are not just looking for revenue. They are looking for well-run practices with a clear story.
What are these buyers looking for?
1. Specialized Expertise: A team with a proven track record in treating conditions like stroke, TBI, or Parkinson’s.
2. Strong Referral Base: Established relationships with local neurologists and hospitals that ensure a steady flow of patients.
3. Operational Maturity: Clean financial records and efficient operational systems that can be easily understood and integrated.
4. Growth Potential: A clear path to expanding services, adding providers, or reaching more patients in underserved areas.
Finding the right type of buyer for your practice depends on your specific goals.
Sale Process
A successful practice sale is a structured process, not a single event. It begins long before your practice is ever presented to a buyer. The first step is preparation. This involves a professional valuation to understand your practice’s true worth and organizing your financials to withstand deep scrutiny. Once prepared, the marketing phase begins, where we confidentially approach a curated list of qualified buyers. This leads to negotiation and a due diligence period, where the buyer verifies every aspect of your practice. This stage is where many deals fail without proper preparation. The final step is closing the deal and ensuring a smooth transition.
Preparing properly for buyer due diligence can prevent unexpected issues.
Valuation
How much is your practice actually worth? The answer is more complex than a simple revenue multiple. Sophisticated buyers value your practice based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric reveals the true cash flow and profitability of your practice by adding back owner-specific and one-time expenses. For many practice owners, their Adjusted EBITDA is significantly higher than their reported net income. This adjusted figure is then multiplied by a market-rate multiple, which is influenced by your specialty, scale, and growth trajectory.
| Metric | Simple Example | Why It Matters for Your Sale |
|---|---|---|
| Reported Net Income | $250,000 |
This is your taxable income, but it doesn’t show the practice’s full earning power. |
| Adjusted EBITDA | $400,000 |
By adding back items like above-market owner salary or personal expenses, we uncover the true cash flow that a buyer is acquiring. |
| Potential Value Increase | Significant |
A higher EBITDA results directly in a higher valuation, often unlocking millions in value. |
A comprehensive valuation is the foundation of a successful practice transition strategy.
Post-Sale Considerations
The transaction closing is not the end of the journey. Planning for what comes next is critical for protecting your wealth and your legacy. Your role after the sale is a key point of negotiation. Will you continue to work clinically, and for how long? We help owners structure deals that protect their autonomy. A major consideration is the tax implication of the sale. The structure of the deal has massive consequences for your after-tax proceeds. Finally, you should consider creative deal structures like an earnout or retaining equity in the new, larger entity. This “rollover equity” can provide a second, often larger, financial return when the new entity is sold years later.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What is driving the strong market for neurological rehabilitation practices in Oregon?
The strong market is driven by a growing demand due to an aging population and a shortage of rehabilitation beds for brain injury patients, creating a favorable environment for selling practices.
What are the key regulatory challenges when selling a neurological rehabilitation practice in Oregon?
Oregon’s Corporate Practice of Medicine (CPOM) laws require physicians to maintain at least 51% ownership of medical practices, limiting the pool of potential buyers and affecting deal structure.
How is the value of a neurological rehabilitation practice in Oregon typically determined?
Value is determined using Adjusted EBITDA, which reflects true cash flow by adding back owner-specific and one-time expenses. This figure is multiplied by a market-rate multiple influenced by specialty, scale, and growth potential.
What should sellers prepare for during the sale process of a neurological rehabilitation practice?
Sellers need professional valuation, organized financials, a strong referral base, and operational maturity to withstand due diligence, confidential marketing to qualified buyers, and smooth transition planning.
What post-sale considerations should be planned for when selling such a practice in Oregon?
Post-sale planning involves negotiating the seller’s continued clinical role, tax implications, protecting autonomy, considering creative deal structures like earnouts or rollover equity, and ensuring staff and legacy protection.
