As the owner of a successful bariatric practice, you understand the unique value you provide to your patients. When you consider selling, you need a valuation that reflects your practice’s specific strengths, an element standard methods often miss as patient demand and investor interest in bariatric medicine grow. We use a specialized approach for medical M&A to help you understand your practice’s true worth and secure the best possible outcome.
The Core of Bariatric Practice Valuation-Adjusted EBITDA
To value your bariatric practice accurately, you must first calculate your Adjusted EBITDA. This figure represents your practice’s true, ongoing earning power. We begin with your standard EBITDA, then “normalize” those earnings by adding back owner-specific or one-time expenses. Our EBITDA Normalization Guide provides a detailed overview of this process.
For instance, you might run personal auto expenses through the practice or have paid for a one-time system upgrade that a new owner will not have to bear. Adjusting for these items gives a potential buyer a clear picture of the practice’s sustainable profitability. This Adjusted EBITDA figure is the foundation of your entire valuation.
Curious how your practice compares to others in your specialty that have recently sold? Get a Confidential Market Comparison →
Finding the Right Multiple for Your Practice
After you have a solid Adjusted EBITDA, we apply a valuation multiple to determine your practice’s enterprise value. This is not a one-size-fits-all number. Your multiple depends heavily on the specifics of your practice and the current M&A market.
Bariatric practices typically attract higher valuation multiples than general practices because of their specialization and high patient demand. The exact figure, however, is influenced by many factors.
| EBITDA Range | Typical Multiple | Factors Influencing Multiple |
|---|---|---|
| <$1M | 4.0x – 6.0x | Solo practitioner, limited referral sources, high churn |
| $1M – $3M | 6.0x – 8.5x | Multi-provider, established referral network, diverse payer mix |
| $3M+ | 8.5x – 12.0x+ | Market leader, strong growth trajectory, multiple ancillary revenue streams |
We analyze recent transactions and market trends to determine an accurate and defensible multiple for your practice, positioning your valuation to reflect its full potential.
Key Factors That Drive Value in Bariatric Practices
The numbers tell part of the story, but your practice’s intangible qualities often make the difference between a good offer and a great one. Buyers look for specific strengths. Do you have a diverse mix of surgical and non-surgical programs? A waiting list for new patients? Are your referral networks with primary care physicians solid and defensible?
The strength of your clinical team’s reputation also adds significant value, which is a key part of valuing intangible assets. We help you frame these strengths to show buyers the full growth potential of your practice.
Proper preparation before selling can significantly increase your final practice value. Explore our Services →
From Valuation to Net Proceeds-Understanding the Final Numbers
Your practice’s enterprise value is not the same as the cash you will receive. To find your actual net proceeds, you must subtract any outstanding debt and transaction-related fees.
We also work with you to model how different private equity deal structures, like earnouts or equity rollovers, affect your final take-home amount and future earnings. This ensures you can evaluate offers clearly and make the best decision for your financial future.
Common and Costly Mistakes in a Bariatric Practice Valuation
We see physicians make several avoidable mistakes, each with the potential to erase years of hard work and permanently reduce their final take-home value.
Using a generic valuation tool is a frequent error that can undervalue a specialized practice by 20-40%. This is not a negotiating setback; it is a permanent loss of capital you cannot recover once the deal is closed. Failing to properly normalize your financials is another critical misstep. If buyers cannot clearly see your true Adjusted EBITDA, they will assume the worst and lower their offer accordingly. This single oversight can cost you hundreds of thousands, if not millions, in enterprise value.
The most damaging mistake, however, is accepting an early offer without running a competitive process. An unsolicited offer is rarely the best offer. Without multiple potential buyers, you have no leverage and are forced to accept terms that heavily favor the buyer. This mistake alone can mean leaving millions on the table.
A tailored valuation is the foundation of a successful practice transition strategy. See our Valuation Services →
Your Path to a Successful Exit
Selling the bariatric practice you built is a major professional milestone. By focusing on the right metrics, preparing your practice well before a sale, and working with advisors who understand your specialty, you ensure the transaction is on your terms. You can achieve an outcome that secures the financial rewards you have earned and sets you up for your next chapter.
Ready to understand the true value of your bariatric practice? Schedule a Confidential Strategy Session →
Frequently Asked Questions
What is the core financial metric used to value a bariatric and obesity practice?
The core financial metric used to value a bariatric and obesity practice is the Adjusted EBITDA. It represents the practice’s true, ongoing earning power by normalizing earnings to add back owner-specific or one-time expenses, providing a clear picture of sustainable profitability.
How are valuation multiples determined for bariatric practices?
Valuation multiples for bariatric practices depend on the practice’s specifics and the current market conditions. Typical multiples range from 4.0x to over 12.0x EBITDA, influenced by factors such as practice size, referral networks, payer mix, growth trajectory, and ancillary revenue streams.
What intangible factors can increase the value of a bariatric practice?
Intangible factors that can increase the value of a bariatric practice include having a diverse mix of surgical and non-surgical programs, a solid and defensible referral network with primary care physicians, a waiting list for new patients, and the strong reputation of the clinical team.
What are common mistakes to avoid when valuing a bariatric practice?
Common mistakes include using generic valuation tools that undervalue specialized practices by 20-40%, failing to properly normalize financials, and accepting early unsolicited offers without running a competitive sales process. These errors can lead to significant losses in enterprise value and final take-home amount.
How does the enterprise value of a bariatric practice differ from the net proceeds an owner receives?
Enterprise value is the overall valuation of the practice, but it differs from the net proceeds an owner receives because outstanding debts and transaction-related fees must be subtracted. Deal structures like earnouts or equity rollovers also affect the final take-home amount and future earnings.