The market for Bariatric and Obesity practices in Texas is active. High demand and growing patient needs create a significant opportunity for practice owners considering a sale. But a successful transition is more than just good timing. It involves a deep understanding of your practice’s value, the buyer landscape, and the sale process itself. This guide provides a strategic overview to help you navigate the path ahead and prepare for your next chapter.
The Texas Bariatric Market: A Landscape of High Demand
Texas presents a unique and compelling market for bariatric and obesity medicine. The state’s demographic and economic trends create a strong, sustainable demand for weight management services, making your practice an attractive asset for potential buyers. Understanding these forces is the first step in positioning your practice for a successful sale.
A Market Driven by Need
The demand for bariatric services in Texas is not speculative. It is rooted in clear public health data. With an adult obesity rate of 34.8%, Texas surpasses the national average. This trend is coupled with a projection that nearly 2.9 million Texans will have diabetes by 2030. For a potential acquirer, these figures don’t just represent statistics. They represent a long-term, growing patient base in need of the specialized care your practice provides.
The Economic Case for Bariatric Care
The conversation around obesity has also shifted to economics, which further fuels buyer interest. Employers in Texas face an additional $4.9 billion in medical costs due to obesity. Bariatric surgery and care are increasingly seen not as elective procedures, but as valuable investments in public health and economic productivity. This economic argument makes practices like yours particularly appealing to sophisticated buyers, including private equity groups and hospital systems, who are looking for solutions with a clear return on investment.
Key Considerations for Your Texas Practice
While the market provides a strong tailwind, the specific characteristics of your practice will determine its appeal to buyers. In Texas, a few factors are particularly important. Your payer mix, for example, tells a critical story. Because bariatric surgery is not always an “essential health benefit” in certain Texas plans, a practice with strong, diversified in-network contracts is often viewed as more stable and valuable than one heavily reliant on a few plans or cash-pay patients.
Beyond financials, buyers look at operational risk. Is the practice’s success and revenue tied entirely to you, the owner? Or have you built a system with associate providers, clear protocols, and ancillary service lines that can run independently? A practice that is not owner-dependent is a more scalable and therefore more valuable platform. Preparing your practice means building a compelling story around not just what you’ve accomplished, but what a new owner can continue to grow.
What We’re Seeing in the Market
The high demand in Texas is mirrored by strong transaction activity across the country. This momentum provides a favorable environment for sellers. Here are three trends we see driving interest from buyers right now.
- Strong Post-Pandemic Rebound. The entire healthcare sector saw disruptions, but bariatrics has bounced back impressively. A 41% increase in surgery volume since 2020 signals a return to, and even an acceleration of, pre-pandemic growth trajectories. Buyers see a specialty that has proven its resilience.
- Expansion into New Demographics. Growth isn’t just about total numbers. It’s about expanding markets. For instance, adolescent weight-loss surgeries have increased by 15% in recent years. This demonstrates an expanding patient population and a forward-looking growth story that is very attractive to investors.
- Active Buyer Appetite. From private equity groups looking to build regional platforms to hospital systems aiming to expand their service lines, buyers are actively seeking well-run bariatric practices. This competition can drive higher valuations for sellers who run a structured, competitive sale process.
Navigating the Sale Process
Selling your practice is a multi-stage journey, not a single event. It begins long before you ever speak to a potential buyer. The first phase is preparation. This involves organizing your financials, understanding your practice’s key performance metrics, and framing the story of its value. This is followed by a confidential marketing process where we identify and approach a curated list of qualified buyers without disrupting your day-to-day operations.
Once offers are received, the process moves into negotiation, selection of the right partner, and signing a Letter of Intent. The most critical phase for many is due diligence. This is where a buyer will meticulously examine every aspect of your practice, from financial records to compliance and contracts. Many deals encounter unexpected hurdles here. Proper preparation, with an advisor who can anticipate buyer questions and organize your data room, is the best way to ensure a smooth path to the closing table.
How Buyers Will Value Your Practice
One of the first questions owners ask is, “What is my practice worth?” Many have heard rules of thumb based on annual revenue. The truth is that sophisticated buyers rarely use revenue multiples. They value your practice based on its profitability, specifically its Adjusted EBITDA. This is your Earnings Before Interest, Taxes, Depreciation, and Amortization, “normalized” by adding back one-time expenses or personal owner perks run through the business.
This Adjusted EBITDA figure is then multiplied by a number–the “multiple”–to determine your practice’s Enterprise Value. This multiple is not a fixed number. It changes based on risk and growth potential. A larger, multi-provider practice is less risky than a solo practice and will command a higher multiple.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | Solo-doc dependent | Associate-driven model |
| Practice Scale | Under $1M EBITDA | Over $3M EBITDA platform |
| Payer Mix | High cash-pay or single plan | Diverse in-network contracts |
| Growth Profile | Stable, mature practice | Clear expansion potential |
Optimizing your EBITDA and understanding a buyer’s perception of these factors is how you move from an average valuation to a premium one.
Thinking Beyond the Sale: Your Future and Your Legacy
A successful transaction is about more than the check you receive at closing. It’s about structuring a deal that aligns with your personal and financial goals for the future. For many physicians, this does not mean walking away entirely. In fact, many modern deals are structured as partnerships.
You might, for example, choose to “roll over” a portion of your sale proceeds into equity in the new, larger company. This allows you to take significant cash off the table today while participating in the future growth of the platform, offering a potential “second bite of the apple” when the larger entity is sold again years later. Deal structures can also include earnouts tied to performance or define your new role, leadership responsibilities, and clinical autonomy post-sale. The key is that these are not afterthoughts. They are critical points to negotiate to ensure the transition protects your legacy and sets you up for the future you want.
Frequently Asked Questions
What makes the Texas bariatric and obesity market attractive for practice sales?
Texas has a high adult obesity rate of 34.8%, exceeding the national average, and a growing patient population with projected 2.9 million Texans with diabetes by 2030. This creates sustained demand for bariatric and weight management services, making practices in this state attractive to buyers.
How do buyers typically value bariatric practices in Texas?
Buyers value practices based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for one-time expenses and owner perks) rather than simple revenue multiples. Multiples vary depending on factors like provider model, practice scale, payer mix, and growth potential.
Why is payer mix important when selling a bariatric practice in Texas?
Because bariatric surgery is not always an essential health benefit in certain Texas insurance plans, buyers prefer practices with a strong and diversified in-network payer mix. Such practices are seen as more stable and valuable compared to those relying heavily on cash-pay patients or a limited number of plans.
What are common steps involved in selling a bariatric and obesity practice in Texas?
The sale process involves preparing financials and performance metrics, confidentially marketing the practice to qualified buyers, negotiating offers, selecting a partner, signing a Letter of Intent, and undergoing due diligence where the buyer reviews all aspects of the practice extensively before closing.
What options do sellers have regarding their involvement after selling their practice?
Many sellers choose partnership deal structures such as rolling over part of their proceeds into equity in the new entity, allowing ongoing involvement and participation in future growth. Deals may also include earnouts tied to performance or define leadership roles and clinical autonomy post-sale to protect the seller’s legacy and future goals.