The San Diego urgent care market is experiencing significant growth, creating a compelling window of opportunity for practice owners. Selling your practice is a major decision that goes beyond market timing. It involves careful planning to protect your legacy and maximize your financial outcome. This guide provides a clear overview of the landscape and the steps involved in a successful transition.
Curious about what your practice might be worth in today’s market?
Market Overview
San Diego is one of the most active urgent care markets in the country. California leads the nation in the number of centers, and San Diego County is home to 94 of them. This is not surprising. Patient volume at urgent care sites has surged by 60% since 2019, driven by demand for convenient, same-day care. The entire U.S. market is projected to grow steadily over the next five years. For you as a practice owner, this signals strong buyer interest. Your practice is a valuable asset in a sought-after location.
Key Considerations for San Diego Owners
A strong market does not guarantee a top valuation. Buyers in San Diego look closely at the operational health of a practice. Before you consider selling, you should focus on a few key areas that directly impact your value.
- Payer Mix and Reimbursement. How your revenue breaks down between commercial insurance, Medicare, and Medicaid matters. Changes in reimbursement rates can impact future profitability, and sophisticated buyers will model this. Understanding and optimizing your payer contracts is a critical first step.
- Operational Capacity. Do you have rooms or hours that are consistently underutilized? While it may seem minor, buyers see this as a sign of inefficiency. We find that developing a clear plan to address this, or framing it as a growth opportunity, is important.
- Staffing Model. Is your practice dependent on you, the owner? Or do you have associate providers who manage a significant patient load? Practices that can run without the owner’s constant presence are seen as less risky and command higher valuations.
Market Activity
The urgent care landscape is not static. It is consolidating. The number of centers in the U.S. has nearly doubled in the last decade, fueled by private equity funds and large healthcare systems looking to expand their footprint. San Diego is a primary target for this activity. For you, this means there are likely multiple types of buyers looking for a practice just like yours. This competition is good. It creates leverage. However, it also means you will be approached with different deal structures and partnership models. Knowing how to create a competitive process among these buyers is the key to achieving a premium valuation.
The Sale Process at a Glance
Selling a practice is a structured process. It is not just about finding a buyer and signing papers. Each stage has its own purpose and potential pitfalls. Running a professional process protects you and ensures you are in control. Here is a simplified look at the journey.
| Sale Stage | What It Involves | Where An Advisor Helps |
|---|---|---|
| 1. Preparation | Gathering financial data, getting a professional valuation, and identifying operational strengths. | We normalize your financials and build a compelling growth story before you ever go to market. |
| 2. Marketing | Confidentially identifying and contacting a curated list of qualified buyers. | We run a competitive process with our proprietary database, ensuring you see multiple offers. |
| 3. Due Diligence | The buyer thoroughly inspects your financials, operations, and legal documents. | We help you prepare for this intense scrutiny to prevent surprises that can derail a deal. |
| 4. Closing | Negotiating the final purchase agreement and planning for the transition. | We guide you through complex legal terms and help structure the deal to meet your goals. |
What is Your Practice Really Worth?
Many owners believe their practice’s value is a simple multiple of yearly revenue. This is rarely true. Sophisticated buyers value your practice based on its profitability, specifically its Adjusted EBITDA. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. The “Adjusted” part is where the real value is found. We work with you to identify and add back owner-related expenses that are not essential to running the business, like an above-market salary or a personal car lease paid by the practice. This process of normalization often reveals a much higher profitability than you see on paper. An urgent care with strong, normalized EBITDA can command a valuation multiple significantly higher than a standard primary care practice.
Life After the Sale
Closing the deal is just one part of the transition. A successful sale also involves carefully planning for what comes next. The right partner and deal structure will protect your future and your team.
Your Financial Future
Many deals are not 100% cash at closing. They may include an earnout, where you receive additional payments for hitting performance targets post-sale. Or they may involve an “equity rollover,” where you retain a stake in the new, larger company. This gives you a potential second financial reward when that larger entity sells in the future. We help you evaluate these structures to see if they align with your personal financial goals.
Your Legacy and Team
You have spent years building your practice and your team. You do not have to give up all control. Many partnership models are designed to keep physician leadership in place. The right buyer will see your staff as a key asset, not an expense to be cut. We focus on finding partners whose culture aligns with yours and who are committed to preserving what you have built.
Not sure if selling is right for you?
Frequently Asked Questions
What is the current market outlook for urgent care practices in San Diego?
The San Diego urgent care market is experiencing significant growth with patient volume surging by 60% since 2019. California leads the nation in the number of centers, and San Diego County hosts 94 urgent care centers, making it one of the most active markets in the country. This creates a strong buyer interest and a compelling window of opportunity for practice owners considering a sale.
What operational factors most affect the valuation of an urgent care practice in San Diego?
Key operational factors impacting valuation include: 1) Payer mix and reimbursement rates, as they influence future profitability. 2) Operational capacity, such as underutilized rooms or hours, which may signal inefficiency to buyers. 3) Staffing model — practices that operate with associate providers and less dependence on the owner typically have higher valuations.
Who are the typical buyers interested in acquiring urgent care practices in San Diego?
The urgent care market is consolidating, with private equity funds and large healthcare systems actively expanding their footprint. San Diego is a primary target for these buyers, meaning practice owners can expect interest from a diverse pool including private equity groups, healthcare systems, and strategic buyers. This buyer competition can create leverage for sellers.
How is the value of an urgent care practice determined?
The value of an urgent care practice is primarily based on its profitability, measured by Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Adjusted EBITDA accounts for owner-related expenses that are not essential to operations, such as above-market salaries or personal expenses paid by the practice, often revealing a higher profitability and commanding higher valuation multiples.
What should I consider for life after selling my urgent care practice?
Life after the sale involves financial planning and legacy considerations. Deals may include cash at closing, earnouts based on performance targets, or an equity rollover giving you a stake in the larger company. It’s important to choose a partner whose culture aligns with yours and who values your staff and legacy, allowing physician leadership to remain and protecting your future goals.
