Guide to Selling a Fertility & IVF Practice in Minnesota

Selling your Fertility & IVF practice in Minnesota presents a unique opportunity. The state is experiencing a record demand for fertility services, creating one of the strongest seller’s markets in years. However, recent changes in state law have also introduced new compliance requirements for healthcare transactions. Understanding how to position your practice in this environment is the first step toward achieving a premium valuation and ensuring a smooth transition. This guide will walk you through the key dynamics.

Market Overview

The market for fertility services in Minnesota is not just stable. It is booming. While general birth rates in the state are declining, the demand for IVF and related treatments is surging, creating a powerful tailwind for practice owners considering a sale.

An IVF Baby Boom

Minnesota is in the middle of a significant
9IVF baby boom. In 2021 alone, the state’s clinics performed a record 7,566 cycles. This is a 36% increase over just five years. Children born via IVF now account for 2% of all births in Minnesota, underscoring the sector’s growth and importance. For a potential buyer, this is not just a statistic. It is proof of a robust and expanding patient base.

Legislative Tailwinds

Adding to the momentum are legislative discussions around mandated insurance coverage for infertility treatments (e.g., HF 3465, SF 1704). If passed, these mandates could dramatically increase patient access and affordability, further fueling demand for services. This potential policy shift makes the Minnesota market particularly attractive to buyers looking for long-term growth.

Key Considerations for Minnesota Sellers

Capitalizing on the strong market requires careful preparation. Buyers are sophisticated and look for well-run practices that are ready for a smooth transition. Here are some key points you should consider:

1. Navigating New Transaction Laws. As of 2023, Minnesota law (HF 402) requires that the state attorney general is notified of many healthcare practice sales in advance. Failing to comply can delay or even derail a transaction. You need a plan to manage this reporting from the start.

2. Proving Your Success. Buyers will want to see your data. Be prepared to share verifiable success rates from SART or your internal records. Equally important is a clear financial picture, showing your revenue trends, patient volume, and payer mix. Clean books are not optional.

3. Highlighting Your Team. A practice is more than just one physician. The stability, experience, and expertise of your entire clinical and administrative team are major value drivers. Buyers are acquiring a functioning system, and your team is a critical part of that.

4. Telling Your Story. What makes your practice different from competitors in the Twin Cities or other parts of the state? Is it your technology, your patient experience, or a specialized service? Defining this narrative helps a buyer see the unique value they are acquiring.

Market Activity and Buyer Interest

The strong fundamentals of the Minnesota fertility market have not gone unnoticed. Sophisticated buyers, including private equity groups, are actively looking for well-run practices to partner with. This high level of interest is directly impacting practice valuations.

Private Equity is a Key Player

Private equity firms are drawn to the fertility sector’s growth, recurring revenue model, and opportunities for expansion. They are not just looking to buy a job. They are looking for platforms for growth. For a selling physician, this can mean a partner who brings capital and business expertise, allowing you to focus on clinical care while securing your financial future. Finding the right partner, however, is key. You want one whose vision aligns with your legacy.

Valuations Reflect the Demand

This strong buyer interest has pushed valuations for top fertility practices to impressive levels. Currently, valuations for fertility clinics often range from 8.0 to 11.2 times Adjusted EBITDA. Where your practice falls in that range depends on factors like your revenue size, growth rate, and the strength of your management team. Proper positioning and a competitive sale process are critical to achieving a valuation at the top end of this range.

The Sale Process at a Glance

Selling a medical practice is a structured process, not a single event. While every deal is unique, most follow a similar path from preparation to closing. Understanding these stages can help you prepare for what is ahead and avoid common pitfalls. Many sales encounter unexpected issues during due diligence, which is why advance preparation is so important.

Here is a simplified look at the journey:

How Your Practice is Valued

A formal valuation is the foundation of any successful practice sale. While the math can get complex, the core concept is straightforward. Buyers are purchasing the future cash flow of your practice. Here is how they typically determine the value.

1. Start with Adjusted EBITDA. This is the key metric. It starts with your practice’s profit but adds back interest, taxes, depreciation, and amortization. Most importantly, it “normalizes” for any owner-specific expenses, like a car lease run through the business or an above-market owner salary. This gives a true picture of the practice’s profitability.

2. Apply a Market Multiple. This Adjusted EBITDA figure is then multiplied by a number based on current market conditions. As mentioned, for a strong fertility practice in Minnesota, this multiple can range from 8.0x to 11.2x. The exact multiple depends on your practice’s size, growth history, and reliance on a single provider.

3. Frame the Narrative. Two practices with the same exact financials can receive different valuations. The one with a clearer growth story, a stronger team, and a better-prepared narrative will command a higher multiple. A valuation is not just a calculation. It is a well-argued case for your practice’s future potential.

Planning for Life After the Sale

The transaction is not the end of the story. A successful sale includes a clear plan for what comes next for you, your team, and the practice you built. Thinking about these issues early in the process ensures your goals are met long after the closing documents are signed.

The Transition for Your Team and Patients

Your staff and patients are central to your practice’s legacy. A key part of any deal negotiation is ensuring a smooth transition plan that respects your team and provides continuity of care. The right buyer will see your team as a primary asset and will be motivated to retain them.

Protecting Your Legacy

You have spent years building a reputation for clinical excellence. For many owners, selling is not just a financial decision. It is a legacy decision. We specialize in finding partners who respect the clinical autonomy and culture you have built. The goal is not just to sell your practice, but to ensure it continues to thrive.

Your Financial Future

The structure of your sale has major implications. Some owners want a clean break, while others want to continue practicing. Deal structures can include an “equity rollover,” where you retain a stake in the larger company, offering the potential for a second, larger payout down the road. This is a common way for doctors to stay involved without the burdens of ownership.