As the owner of a bariatric and obesity practice, you’ve built a valuable asset that meets a critical need. When it is time to consider your next chapter, understanding the Phoenix market is your first step. This guide covers the key factors impacting practice sales, from valuation in a market with growing demand to navigating the sale process. We will give you the clarity needed to make an informed decision.
Phoenix Market Overview
The market for bariatric and obesity practices in Phoenix is strong, driven by clear and compelling demographic trends. This is not a temporary spike. It is a sustained condition creating significant opportunities for practice owners like you. The demand for your services is high, which makes your practice an attractive asset for a growing pool of potential buyers.
Here are three factors shaping the Phoenix market right now:
1. A Growing Patient Base. Arizona’s adult obesity rate climbed to 31.9% in 2023, representing over 2.3 million people. This rising prevalence ensures a long-term, stable patient pipeline for bariatric and obesity specialists.
2. Geographic Concentration. The need for your services is most acute right here in Phoenix. Research shows the highest rates of obesity, often exceeding 40%, are concentrated within the city’s urban core, making practices in these areas particularly valuable.
3. Increased Buyer Interest. These powerful demographic tailwinds have not gone unnoticed. Sophisticated buyers, from local hospital systems to national private equity groups, are actively seeking to expand their footprint in the Phoenix bariatrics space.
Key Considerations for Sellers
While the Phoenix market is favorable, a successful sale depends on more than just location. Buyers will look closely at the unique characteristics of your practice. Your patient base, referral patterns, and payer contracts are all part of the equation. It is also important to consider the human element. Planning for a smooth transition for your dedicated staff and loyal patients is a big part of protecting your legacy. Finally, the structure of the sale itself has major tax and legal implications. Thinking through these details before you go to market is the best way to control the process and maximize your outcome.
Market Activity and Trends
You likely will not see bariatric practices listed for sale on public websites. Most transactions happen privately and confidentially to protect the practice, its staff, and its patients. However, the underlying activity is strong, with distinct trends shaping who is buying and why.
Who is Buying?
The buyers in today’s market are typically strategic and well-capitalized. This includes large hospital networks looking to expand their service lines and private equity-backed platforms seeking to build a regional or national presence. These groups are drawn to the strong, non-cyclical demand for bariatric services in a growing city like Phoenix.
What Are They Looking For?
These sophisticated buyers look beyond just revenue. They want profitable, well-managed practices with a strong reputation and opportunities for growth. A practice with multiple providers and a healthy payer mix is often more attractive than a solo practice heavily reliant on one person.
Protecting Your Confidentiality
This trend toward private deals is good for you. A confidential process, managed by an advisor, allows you to explore your options without alerting competitors, staff, or patients before you are ready. It ensures that you only engage with serious, pre-qualified buyers.
Protecting your confidentiality while exploring sale options is critical.
The Sale Process
Selling your practice is a marathon, not a sprint. From the initial decision to the final closing, the process often takes 12 months or more. It begins long before the first conversation with a buyer. The first phase is preparation: getting a professional valuation, organizing your financial records, and identifying potential areas for improvement. Next, we would confidentially market the opportunity to a curated list of qualified buyers. This leads to negotiation and structuring the best possible deal. The most intensive phase is often due diligence, where the buyer inspects every aspect of your business. Many sales fall apart here due to surprises. Proper preparation prevents this. The final stage involves legal documentation, closing the sale, and executing a smooth transition.
How Your Practice is Valued
Forget simple rules of thumb. Sophisticated buyers value your practice based on a clear formula: your Adjusted EBITDA multiplied by a market-based multiple. Adjusted EBITDA is your real cash flow, calculated by taking your net income and adding back interest, taxes, depreciation, amortization, and any owner-specific or one-time expenses. This number represents the true earning power of the business. That figure is then multiplied by a number (the multiple) that reflects your practice’s quality, risk, and growth potential. As you can see below, many factors influence where your practice falls in the typical 3x to 6x EBITDA range.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | Solo physician dependent | Multiple associate providers |
| Growth | Stagnant patient volume | Clear path for expansion |
| Payer Mix | Heavily Medicaid-reliant | Diverse commercial & cash-pay |
| Systems | Manual, paper-based | Modern EMR & billing systems |
A comprehensive valuation does more than calculate a number. It tells the story of your practice in a way that resonates with buyers and justifies a premium price.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
The day you close the deal is not an ending. It is the beginning of a new phase for you and your practice. Planning for this transition is just as important as negotiating the sale price. You will need to consider your own role. Do you want to retire immediately, or would you prefer to stay on for a few years, focusing on patient care without the burdens of management? You should also plan for your financial future, working with experts to manage your proceeds in a tax-efficient way. For many owners, the sale is also an opportunity to participate in future growth by retaining equity in the new, larger organization. This allows you to secure your legacy and benefit from a potential “second bite of the apple” down the road.
The right exit approach depends on your personal and financial objectives.
Frequently Asked Questions
What factors make the Phoenix market attractive for selling a Bariatric & Obesity practice?
The Phoenix market is attractive due to a growing patient base with Arizona’s adult obesity rate at 31.9% in 2023, geographic concentration of obesity in Phoenix‚Äôs urban core, and increased buyer interest from hospital systems and private equity groups seeking expansion.
Who are the typical buyers for Bariatric & Obesity practices in Phoenix?
Typical buyers include strategic and well-capitalized entities such as large hospital networks wanting to expand service lines and private equity-backed platforms building regional or national presence.
How is a Bariatric & Obesity practice valued in Phoenix?
Valuation is based on Adjusted EBITDA—net income plus interest, taxes, depreciation, amortization, and any owner-specific or one-time expenses—multiplied by a market-based multiple generally ranging from 3x to 6x, influenced by factors like provider model, growth potential, payer mix, and systems.
What steps are involved in the sale process of a Bariatric & Obesity practice?
The sale process usually takes 12 months or more, starting with preparation like valuation and financial organization, then confidential marketing to qualified buyers, negotiation, due diligence, and finally legal closing and transition execution.
How can sellers protect confidentiality during the sale of their practice?
Sellers protect confidentiality by conducting private, confidential deals managed by advisors, allowing exploration with serious buyers only, thereby avoiding alerting competitors, staff, or patients prematurely.