The market for dermatology practices in Oklahoma is currently very active. This presents a significant opportunity for owners considering their next move. However, navigating this landscape requires a clear understanding of your practice’s value, the key players involved, and the steps to a successful sale. This guide offers insights into the process, from market trends to valuation, helping you understand how strategic preparation can make a profound difference in your final outcome.
Market Overview: A Seller s Climate in Oklahoma
If you are a dermatology practice owner in Oklahoma, the current market conditions are favorable. We are seeing a combination of strong local performance and national trends that make this a compelling time to explore your options.
Strong Local Profitability
The financial potential for dermatology in Oklahoma is clear. For example, we’ve seen practices in the Oklahoma City area with revenues over $1,000,000 annually operate with low overhead. This level of efficiency is exactly what sophisticated buyers look for. It demonstrates a healthy, well-managed business with a stable patient base, which is the foundation of a premium valuation.
National Growth and Demand
This local strength is supported by a booming national market. The U.S. dermatology sector is projected to grow at a rate of 7.3% annually over the next decade. This isn’t just a number. It translates directly into more buyers, more competition, and more capital flowing into the specialty, all of which benefit you as a potential seller.
3 Key Considerations Before You Sell
A strong market is a great start, but a successful sale depends on careful preparation. It’s about more than just finding a buyer. It’s about protecting your legacy and maximizing the financial outcome you’ve worked so hard for. Here are three critical areas we guide our clients through.
- Understanding Your True Value. Your practice’s worth is not simply its revenue. The most important metric buyers use is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure normalizes your earnings to show the true cash flow of the business. Getting this number right is the foundation of your entire negotiation, and it is more complex than many owners realize.
- Assembling the Right Team. A practice sale is not a solo endeavor. You will need legal and financial experts who specialize in healthcare transactions. They handle critical documents like non-disclosure agreements, letters of intent, and the final purchase agreement, ensuring your interests are protected at every stage.
- Ensuring Flawless Compliance. Transferring patient records is a sensitive process governed by strict HIPAA regulations. Any misstep can lead to significant liabilities. A clear, compliant data migration plan is not just a detail. It is a core requirement for a secure and professional transaction.
Market Activity: Who is Buying in Oklahoma?
The interest in dermatology practices is not theoretical. It’s happening on the ground, driven largely by sophisticated, well-capitalized buyers who are actively looking for great practices to partner with.
The Rise of Private Equity Investment
Nationally, private equity (PE) firms and their platform companies have been a major force, completing over 184 dermatology acquisitions in recent years. These groups aren’t just buying practices. They are building regional and national networks. They bring capital for growth, sophisticated management systems, and a clear strategy for expansion. For an independent owner, this represents a chance to de-risk, take chips off the table, and gain a powerful partner for future growth.
Recent Transactions in Your Backyard
This trend is not just happening in other states. It’s here in Oklahoma. The acquisition of Dermatology Associates of Oklahoma by Epiphany Dermatology, a major PE-backed group, showed a clear commitment to the region. More recently, the acquisition of Texoma Dermatology Clinic, serving southern Oklahoma, further proves that buyers see our state as a strategic area for growth. Your practice could be the next logical step in their expansion plan.
The 4 Stages of the Sale Process
From the outside, selling a practice can seem overwhelming. In reality, it is a structured process that typically unfolds over 6 to 12 months. When you work with an advisor, our job is to manage this process so you can continue focusing on your patients. Here s a simplified look at the journey.
- Preparation and Valuation. This is the critical first phase. We work with you to analyze your financials, calculate the all-important Adjusted EBITDA, and prepare a confidential marketing package that tells the story of your practice. This sets the foundation for everything to come.
- Confidential Marketing. We don’t just “list” your practice. We run a discreet and targeted process, confidentially approaching a curated list of qualified buyers, including strategic partners and private equity groups that we know are active in your region.
- Negotiation and Due Diligence. After receiving initial offers, we help you compare them not just on price, but on structure and terms. Once you select a partner, they will begin a due diligence process to verify the information. Our role is to manage this phase to prevent surprises and keep the deal on track.
- Closing and Transition. The final stage involves completing the legal paperwork and planning for a smooth transition for you, your staff, and your patients. This includes finalizing any ongoing employment agreements and communication plans.
How Your Dermatology Practice is Valued
One of the first questions every owner asks is, “What is my practice worth?” The answer is a mix of art and science. It is not based on a simple percentage of revenue. Sophisticated buyers use a formula: Adjusted EBITDA x a Valuation Multiple.
First, we establish your Adjusted EBITDA. We start with your net income and add back interest, taxes, depreciation, and amortization. Then, we “adjust” for any one-time expenses or owner-specific costs (like a vehicle lease or above-market salary) to find the true, ongoing profitability of your practice.
Next, we apply a valuation multiple. This number is not fixed. It changes based on several factors, showing how buyers perceive the quality and risk of your earnings.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | 100% reliant on the owner | Associate-driven with multiple providers |
| Service Mix | Mostly general dermatology | Strong cosmetic and ancillary revenue |
| Scale & Size | Under $500K in EBITDA | Over $1M in EBITDA |
| Growth Profile | Stable but flat patient volume | Demonstrable year-over-year growth |
A practice with strong associates and diverse cosmetic services will earn a higher multiple than a solo practice. Understanding these drivers is the first step to maximizing your value.
Beyond the Sale: Planning Your Transition
The day the deal closes is a beginning, not an end. A successful transaction includes a clear plan for what comes next. The best deals are structured to protect your legacy and align with your personal goals for the future.
Your Future Role
Many owners choose to continue practicing for several years after a sale. Your new partner values your expertise and your relationship with patients. We help you negotiate an employment agreement that defines your compensation, schedule, and clinical responsibilities, ensuring your transition is on your terms.
Protecting Your Team
Your staff is one of your practice s most valuable assets. A key part of any transition plan is ensuring your team feels secure and valued. Communicating the vision and opportunities that come with a new partner is important for a smooth integration and continued success.
The Second Bite of the Apple
Modern deals often include an opportunity to “roll over” a portion of your sale proceeds into equity in the new, larger company. This means you remain an owner and get to participate in the future growth of the platform. This “second bite of the apple” can often be more lucrative than the initial sale itself, and it perfectly aligns your interests with your new partner.
Frequently Asked Questions
What is the current market climate for selling a dermatology practice in Oklahoma?
The current market for dermatology practices in Oklahoma is very active and favorable for sellers. Strong local profitability and national growth trends make it an excellent time to consider selling your practice.
How is the value of a dermatology practice in Oklahoma determined?
The value of a dermatology practice is primarily determined by its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) multiplied by a valuation multiple. Factors influencing the multiple include the provider model, service mix, size and scale, and growth profile.
Who are the typical buyers of dermatology practices in Oklahoma?
Buyers include sophisticated, well-capitalized private equity firms and strategic partners looking to build regional and national networks. Recent transactions in Oklahoma, such as the acquisitions of Dermatology Associates of Oklahoma and Texoma Dermatology Clinic, illustrate this trend.
What are the key steps involved in selling a dermatology practice in Oklahoma?
The selling process typically includes four stages: 1) Preparation and Valuation, 2) Confidential Marketing to qualified buyers, 3) Negotiation and Due Diligence, and 4) Closing and Transition, all guided by experienced advisors to ensure a smooth sale.
What should a seller consider for post-sale transition when selling a dermatology practice?
Post-sale considerations include negotiating a continued clinical role and employment agreements, protecting and communicating with your staff for a smooth transition, and potentially rolling over a portion of sale proceeds into equity in the new company to participate in future growth.