Selling your clinic-based ABA therapy practice in Oregon presents a distinct set of challenges and opportunities. Unlike other states, Oregon’s stringent laws on corporate ownership reshape the entire process, from finding a buyer to structuring a deal. This guide provides a clear overview of the market, key considerations, and the steps you need to take to achieve a successful and profitable exit. We can help you understand your options without any pressure.
Market Overview
The market for ABA therapy practices in Oregon is a story of contrasts. On one hand, demand is incredibly strong. The national market for ABA services is growing, and the need for qualified BCBAs continues to surge. This creates a very favorable environment for profitable, well-run clinics.
However, this demand is filtered through Oregon’s unique regulatory framework. Here is what you need to know:
- High National Demand: The U.S. market for applied behavior analysis is projected to grow significantly, which puts your services in a desirable position.
- Strict Oregon Ownership Laws: Oregon law requires that medical practices be at least 51% owned by licensed medical professionals. This dramatically changes the landscape of potential buyers compared to other states.
This dynamic means that while your practice is valuable, finding the right buyer requires a different strategy than what might work elsewhere.
Key Considerations for Oregon ABA Sellers
With Oregon’s ownership rules in mind, preparing for a sale requires focusing on fundamentals that appeal to practitioner-led buyers. Before you begin the process, you need to have a clear and compelling story for your practice, supported by strong documentation. We find that successful sales hinge on getting a few key areas right.
The Right Buyer Profile
Forget the large private equity funds you read about in national headlines. In Oregon, your ideal buyer is likely another licensed practitioner, a local medical group, or a strategic partner who can comply with the 51% ownership requirement.
Financial and Operational Health
Your financials must be clean and easy to understand. Be prepared to present a clear picture of your revenue, expenses, and Adjusted EBITDA. Beyond the numbers, showcase your stable team of BCBAs, efficient billing practices, and strong patient referral sources.
Market Activity and Buyer Trends
While the broader U.S. autism services market has been dominated by private equity, Oregon is writing its own rules. Nationally, PE firms were behind 85% of transactions between 2017 and 2022. This activity drove valuations up, but it also created a very specific type of M&A environment. In Oregon, the landscape now looks quite different.
Here are the key trends affecting your sale:
- A Shift in Buyer Demographics: Due to the state’s ownership laws, the most active buyers are not large, out-of-state corporations. They are individual practitioners looking to expand, established Oregon-based medical groups, and other entities that can meet the ownership criteria.
- Focus on Strategic Fit: These buyers are often looking for more than just profit. They value clinical reputation, community standing, and a stable, well-trained staff. Your practice’s story and legacy become a much more significant part of the deal.
The Sale Process at a Glance
Selling your practice is a structured process, not a single event. A well-managed process ensures you maintain confidentiality, create competitive tension among buyers, and avoid common pitfalls. Each stage requires careful preparation and execution. A misstep in an early stage can cause problems down the line, especially during due diligence when buyers scrutinize every detail.
Here is a simplified look at the key stages:
| Stage | What It Involves | A Common Challenge |
|---|---|---|
| Preparation & Valuation | Gathering financial data and determining a realistic market value. | Overlooking “add-backs” that can increase your Adjusted EBITDA and valuation. |
| Marketing | Confidentially identifying and approaching a curated list of qualified buyers. | Alerting the market too broadly, which can damage confidentiality and staff morale. |
| Negotiation & LOI | Evaluating offers and signing a non-binding Letter of Intent with a buyer. | Agreeing to unfavorable terms that are difficult to change later in the process. |
| Due Diligence & Closing | The buyer verifies all financial, legal, and operational information. | Unprepared financials or compliance gaps can lead to price reductions or a failed deal. |
How Your ABA Practice is Valued
A professional valuation is the foundation of any successful sale. While many owners have a general sense of their practice’s worth, buyers use a specific methodology. They typically determine value by taking your Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization, normalized for one-time or owner-specific expenses) and applying a market multiple.
For ABA therapy practices, this multiple often ranges from 6x to 8x EBITDA. However, the final number depends on more than just a formula. Buyers pay for quality and future potential. Key factors that influence your multiple include:
- Provider Stability: Practices that do not rely entirely on the owner command higher values.
- Payer Mix: A strong base of commercial insurance contracts is highly attractive.
- Growth Story: Demonstrable trends in patient growth and revenue are critical.
- Clinical Reputation: A strong brand in your community is an intangible asset that has real value.
Planning for Life After the Sale
The day you close the deal is not the end of the journey. The decisions you make during the sale process have long-lasting implications for your finances, your staff, and your personal legacy. Planning for the post-sale period is just as important as negotiating the price.
Protecting Your Legacy and Staff
A key part of negotiating with practitioner-buyers is ensuring a smooth transition that protects the team you built and the patients you serve. This can be structured into the purchase agreement, ensuring continuity of care and culture.
Structuring for Tax Efficiency
How your deal is structured (as an asset sale vs. an entity sale) has major consequences for your after-tax proceeds. Getting expert advice on this single point can significantly impact your net financial outcome. Thinking about this early is critical.
Navigating Oregon’s unique market requires a specific strategy and expert guidance.
Frequently Asked Questions
What makes selling a clinic-based ABA therapy practice in Oregon different from other states?
Oregon’s stringent laws require that medical practices be at least 51% owned by licensed medical professionals. This rule limits potential buyers to licensed practitioners or groups that meet this ownership criterion, unlike other states where private equity or larger corporations might be interested.
Who is the ideal buyer for my ABA therapy practice in Oregon?
The ideal buyer is typically another licensed practitioner, a local Oregon medical group, or a strategic partner who can comply with the 51% ownership requirement mandated by Oregon law. Large private equity firms are generally not viable buyers due to these ownership restrictions.
How is the value of my ABA therapy practice determined during the sale?
Your practice’s value is primarily based on its Adjusted EBITDA multiplied by a market multiple, usually ranging from 6x to 8x EBITDA. Factors like provider stability, payer mix, growth trends, and clinical reputation also significantly influence the final valuation.
What are the key steps in the process of selling my ABA therapy clinic in Oregon?
The main stages include: 1) Preparation & Valuation – gathering financial data and assessing the market value; 2) Marketing – confidentially approaching qualified buyers; 3) Negotiation & LOI – evaluating offers and signing a Letter of Intent; and 4) Due Diligence & Closing – buyer verification of all information and finalizing the sale.
What should I consider when planning for life after selling my ABA practice?
Post-sale planning is crucial for protecting your legacy and staff, ensuring a smooth transition of care and clinic culture. Additionally, structuring the deal for tax efficiency, such as deciding between an asset sale or entity sale, can significantly impact your net financial outcome.