Guide to Selling a Cardiology Practice in Michigan

You are likely considering the next chapter for the cardiology practice you’ve built. Selling is a significant milestone with complex financial and personal implications. This guide provides a direct look at the current market in Michigan, what drives your practice’s value, and how to navigate the sale process. Understanding these dynamics is the first step toward a successful transition that protects your legacy and financial future.

Market Overview

The market for cardiology practices in Michigan is shaped by powerful national trends. High demand, a shifting care model, and new types of buyers have created a unique window of opportunity for practice owners. This is not a “wait and see” market. It is a “prepare and act” market.

Strong Demand Fundamentals

Michigan’s aging population directly fuels the need for cardiovascular care. With adults over 60 accounting for nearly 90% of cardiology revenue, demographic trends are firmly in your favor. This is compounded by an anticipated national shortage of cardiologists, with nearly a third of current specialists approaching retirement age. This supply-and-demand imbalance places well-run practices in a very strong negotiating position.

New Buyer Landscape

The most significant shift is the aggressive entry of private equity into cardiology. PE firms now own nearly half of all private cardiology practices, drawn by strong revenue and the move to outpatient procedures. This creates a competitive environment where strategic buyers and health systems are also actively seeking partnerships, giving you more options than ever before.

Key Considerations

An active market is a great starting point, but a successful sale depends on careful preparation. Buyers look past top-line revenue to the core health of your business. They scrutinize profitability, the diversity of your insurance payor mix, and the strength of your referral network. Issues here can weaken your position. We often hear from physicians who believe they can start this process just a few months before they want to retire. In reality, preparing a practice for a premium sale and finalizing a deal typically takes 6 to 12 months. Starting the planning process 2-3 years in advance is ideal. It gives you time to optimize operations and ensures you are selling from a position of strength, not scrambling to meet a deadline.

Market Activity

While the broader Michigan medical market is active, cardiology is experiencing a unique surge driven by specific trends. Understanding these currents is important for timing your sale. Here is what we are seeing today:
1. The Platform-Building Race. Private equity firms are not just buying single practices. They are acquiring “platform” practices to serve as a base for future growth in a region. If your practice has a strong reputation and multiple providers, you could be a prime target for becoming a platform, which often commands a premium valuation.
2. The Outpatient Gold Rush. The shift of procedures from hospitals to Ambulatory Surgical Centers (ASCs) and Office-Based Labs (OBLs) is a major focus for buyers. If your practice has an ASC or OBL, or has the potential to add one, it significantly increases your value. It’s a proven revenue driver that sophisticated buyers actively seek.
3. Strategic Consolidation. As PE-backed groups and health systems expand, independent practices face growing competitive pressure. Selling to a larger group can provide the resources to thrive and secure your team’s future, turning a competitive threat into a financial opportunity.

Sale Process

Selling your practice is a structured project, not a single event. It begins with a thorough and objective valuation to set a realistic price expectation. From there, we create marketing materials that tell your practice’s story and present its strengths while protecting your confidentiality with strict non-disclosure agreements. We then identify and approach a curated list of qualified buyers. The goal is to generate multiple offers to create competitive tension. Once an offer is accepted, the most intensive phase begins: due diligence. This is where the buyer verifies every detail of your financials and operations. Being prepared for this scrutiny is the key to a smooth closing. unpreparedness here is where many deals fall apart.

Valuation

Many doctors think of value as a simple multiple of revenue. Sophisticated buyers, however, value your practice based on its profitability, specifically its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure normalizes your earnings by adding back owner-specific perks and one-time expenses to show the true cash flow a new owner can expect. A higher and more stable Adjusted EBITDA leads to a higher valuation. For a cardiology practice, the multiple applied to that EBITDA can range from 4x to over 8x. The final number depends on several factors.

Understanding these drivers is the first step. The next is running a process that makes buyers compete based on your practice’s full potential.

Post-Sale Considerations

Your work is not finished once the sale documents are signed. A successful transition requires a clear plan for what comes next. This includes communicating the change to your staff and patients to ensure continuity of care and protect the practice’s goodwill. You also need a strategy for your personal finances. The structure of the deal heavily impacts your net, after-tax proceeds. Finally, your role after the sale must be clearly defined in the purchase agreement. Whether you plan to retire immediately or stay on for a few years, negotiating these terms upfront is critical for a smooth and predictable transition into your next chapter. Thinking about these issues from the very beginning is the mark of a well-executed exit.