Selling your Dialysis & Nephrology practice is one of the most significant decisions of your career. In New Hampshire, the market is shaped by unique state regulations, a nationwide shift toward value-based care, and a dynamic mix of potential buyers. Navigating this landscape requires careful preparation to protect your legacy and maximize your financial outcome. Understanding how to position your practice is the first step.
Market Overview
The market for Dialysis and Nephrology practices in New Hampshire is active, but it has specific characteristics. It is not just about finding a buyer. It is about finding the right one who understands the local environment.
Regulatory Focus
New Hampshire has distinct licensing rules for End-Stage Renal Disease (ESRD) centers, known as He-P 811. Any change in ownership must comply with these state-level regulations. Additionally, New Hampshire’s Certificate of Need (CON) laws can impact plans for expansion or major equipment purchases, a key factor for incoming buyers.
Shift to Value-Based Care
Nationally, models like the Kidney Care Choices (KCC) program from CMS are changing how nephrology practices operate and are valued. Buyers are now looking closely at a practices participation and performance in these models. A practice that can demonstrate high-quality, cost-effective care is in a strong position.
Partnership Dynamics
The buyers themselves are changing. Beyond local hospitals, large dialysis organizations, private equity funds, and new physician-led platforms are actively acquiring practices. Each buyer type comes with different goals and structures, from full buyouts to strategic partnerships.
Key Considerations Before a Sale
Before you even think about putting your practice on the market, it is helpful to look inward. Getting your house in order ahead of time is the best way to ensure a smooth process and a strong valuation. We see many practice owners get started on this 2 to 3 years before they plan to sell. Buyers pay for proven performance, not just potential.
Here are three areas to focus on now:
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Regulatory and Compliance Health. Is your practice’s licensure under He-P 811 current and in good standing? Are your quality metrics, like those related to Healthcare-Associated Infections (HAI) reported by NH DHHS, well-documented and favorable? Buyers will scrutinize this during due diligence.
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Operational Strength. What do your staffing and referral patterns look like? High staff turnover or heavy reliance on a single referral source can be seen as risks. Addressing issues like physician burnout or strengthening referral relationships can directly increase your practice’s stability and appeal.
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Financial Clarity. Your financial records must be clean and easy for a buyer to understand. This means having clear documentation of your revenue, profitability, and payor mix. If you are part of a value-based care model, the financial impact of that arrangement should be clear.
Market Activity
The M&A market for nephrology practices is strong, driven by new investment and care models. However, information on specific transactions in New Hampshire is often not public. This is where we can help, as we maintain a proprietary database of transactions to give our clients an edge.
Who is Buying?
There are more options than ever for practice owners. Strategic acquirers like large dialysis organizations (e.g., DaVita) and local hospital systems continue to be active. At the same time, physician-led kidney care platforms and private equity funds are aggressively entering the market. They are often looking for platform practices to build upon or smaller practices to add to an existing network.
What Are They Looking For?
Buyers are looking for well-run practices with stable patient populations and strong clinical reputations. Increasingly, they are also searching for practices that have adapted to value-based care. These practices have demonstrated an ability to manage patient outcomes effectively, which aligns with the future of healthcare reimbursement. Finding the right buyer for your specific goals is a critical part of the process.
The Sale Process
Selling a medical practice follows a structured path. While every sale is unique, the process generally moves through four main stages. Understanding these steps can help demystify the journey.
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Preparation and Valuation. This is the foundational stage. It involves organizing your financial and operational documents and getting a comprehensive, professional valuation. This valuation sets a realistic expectation and becomes the basis for negotiation.
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Confidential Marketing. Your practice is presented to a curated list of potential, pre-vetted buyers under strict confidentiality. This is not like listing a house. The goal is to create a competitive environment without disrupting your staff, patients, or referral sources.
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Negotiation and Due Diligence. After receiving initial offers, you negotiate a Letter of Intent (LOI) with the top candidate. This leads to the due diligence phase, where the buyer conducts an in-depth review of your practice. This is often where deals encounter challenges, making thorough preparation critical.
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Closing and Transition. Once due diligence is complete, final legal documents are drafted and signed. The sale closes, and you begin the transition phase, which is planned well in advance to ensure a smooth handover for you, your staff, and your patients.
What is Your Practice Worth?
A practice’s valuation is more than a simple formula. It is about telling the right story with the right numbers. The core metric used by buyers is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure normalizes your earnings by adding back owner-specific expenses, like an above-market salary, to show the true cash flow of the business.
That Adjusted EBITDA figure is then multiplied by a number, the “multiple.” This multiple is influenced by many factors.
| Factor | Impact on Valuation Multiple |
|---|---|
| High Reliance on a Single Doctor | Tends to Lower the Multiple |
| Diverse Mix of Payors | Tends to Raise the Multiple |
| Proven Success in Value-Based Care | Tends to Raise the Multiple |
| Multiple Providers and Locations | Tends to Raise the Multiple |
Practices with under $500K in Adjusted EBITDA might see multiples of 3.0x to 5.0x. Those with over $1M can command multiples in the 5.5x to 7.5x range or higher, especially with a strong growth profile. Most practices we work with are undervalued until their EBITDA is properly adjusted and their growth story is framed for buyers.
Post-Sale Considerations
The deal is not done at closing. Planning for what comes next is just as important as negotiating the price. These decisions affect your finances, your career, and your legacy.
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Your Future Role. Do you want to continue practicing clinically? For how long? Your role post-sale is a key point of negotiation. Many deals offer flexible options that keep physicians involved without the burdens of ownership.
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Your Staff and Legacy. A successful transition ensures your team is taken care of and the patient care standards you established are maintained. This is a critical part of protecting the legacy you spent years building.
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Your Financial Future. The structure of the sale has major tax implications. Furthermore, many deals today include an “earnout” (future payments based on performance) or an “equity rollover” (retaining a minority stake in the new, larger company). These structures can offer significant upside but require careful planning.
Every practice owner deserves to understand their options before making a decision. The right exit plan depends entirely on your personal and financial goals.
Frequently Asked Questions
What are the key state regulations affecting the sale of a Dialysis & Nephrology practice in New Hampshire?
In New Hampshire, the sale of a Dialysis & Nephrology practice must comply with licensing rules under He-P 811 for End-Stage Renal Disease (ESRD) centers. Additionally, Certificate of Need (CON) laws may impact expansions or major equipment purchases that a new buyer might plan.
How does participation in value-based care models affect the valuation of a Dialysis & Nephrology practice?
Participation in value-based care models like the Kidney Care Choices (KCC) program from CMS can significantly enhance a practice’s valuation. Buyers look for practices demonstrating high-quality, cost-effective care, as this indicates strong future reimbursement potential aligned with evolving healthcare trends.
Who are the typical buyers for these practices in New Hampshire?
Typical buyers include large dialysis organizations (such as DaVita), local hospital systems, private equity funds, and emerging physician-led kidney care platforms. These buyers vary in goals, from full ownership buyouts to strategic partnerships.
What are the main steps involved in selling a Dialysis & Nephrology practice?
The sale process generally includes four stages: 1) Preparation and valuation of the practice, 2) Confidential marketing to pre-vetted buyers, 3) Negotiation and due diligence culminating in a Letter of Intent (LOI), and 4) Closing of the sale and transition planning to ensure a smooth handover.
How is the valuation of a Dialysis & Nephrology practice determined?
Valuation primarily uses Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which normalizes earnings by adding back owner-specific expenses. This adjusted EBITDA is multiplied by a factor, or multiple, influenced by factors such as payor diversity, number of providers, demonstrated success in value-based care, and reliance on single doctors.