The market for selling a GI & Hepatology practice in Fort Lauderdale is more active than ever. Private equity interest and strategic buyers are creating significant opportunities. For practice owners, this represents a unique window to capitalize on years of hard work. However, a successful sale depends on strategic preparation. This guide provides a direct look at market conditions, valuation drivers, and the key steps you should consider on your path to a transition.
The Fort Lauderdale GI Market: An Overview
Your practice operates in a dynamic and mature healthcare environment. Understanding the key forces at play is the first step in positioning your practice for a successful sale.
A Competitive and Established Landscape
Fort Lauderdale is a major hub for gastrointestinal care, with over 185 gastroenterologists practicing in the area. The market includes prominent hospital systems like Broward Health and Holy Cross Health, as well as numerous independent groups. For a seller, this density means that buyers have options. A practice must have a clear story that highlights its unique strengths, such as a strong referral network, efficient operations, or a desirable payer mix, to attract premium interest.
The Private Equity Influence
You don9t have to look far to see the impact of private equity on GI in South Florida. The growth and subsequent sale of Gastro Health to a PE firm set a precedent. These groups are actively seeking to build platforms by acquiring practices like yours. This trend drives competition and can lead to higher valuations, but it also means you will likely be negotiating with highly experienced deal professionals.
Key Considerations Beyond the Numbers
A buyer looks at more than just your financial statements. They are buying future cash flow, and they assess the risks associated with it. How dependent is the practice on you, the owner? A practice with multiple providers and a strong team is often valued more highly than one reliant on a single physician. Do you have an in-office endoscopy suite? Ancillary services like this significantly boost profitability and strategic value. Your payer contracts, referral patterns, and opportunities for growth are all part of the story. A well-run practice with a strong reputation and a clear path to future growth will always command a buyer9s attention. Thinking about your practice from this perspective is the first step toward maximizing its value.
What’s Happening in the Market Right Now
The M&A market for GI practices isn’t just theoretical. It is active and creating opportunities for owners who are prepared. Here are the key dynamics we see today.
- Increased Buyer Appetite. Both private equity firms and existing healthcare platforms are actively looking to acquire GI practices in South Florida to build regional density.
- Focus on Platforms. Buyers are not just buying a single office. They are looking for “platform” practices1 well-run, profitable groups that can serve as a foundation for future growth and acquisitions.
- Strategic Valuations. The presence of multiple motivated buyers is creating a competitive environment. This can lead to strong valuations for practices that are properly positioned and marketed.
- A Closing Window. While the market is hot, these conditions may not last forever. Economic shifts or changes in healthcare policy could alter the landscape. Timing your practice sale correctly can be the difference between average and premium valuations.
Understanding the Sale Process
Selling your practice is a structured process, not a single event. It typically begins with a thorough valuation to understand what your practice is worth. This is followed by a preparation phase, where we help you organize your financials and operations to present them in the best possible light. Next, we run a confidential marketing process to identify and engage a curated list of qualified buyers without alerting your staff or competitors. After negotiating preliminary offers, you move into the due diligence phase. This is an intensive review where the buyer verifies every aspect of your practice. The due diligence process is where many practice sales encounter unexpected challenges. Proper preparation is key to a smooth closing.
How is a GI Practice Valued?
Practice valuation is more than a simple formula. Buyers value your practice based on a key metric: Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is not the same as the net income on your tax return. We calculate it by taking your profit and adding back owner-specific expenses and non-recurring costs to show the practice’s true earning power. For example, a local GI practice was recently on the market with $1.2 million in EBITDA.
This EBITDA figure is then multiplied by a number1the “multiple”1to determine the enterprise value. This multiple is not fixed. It changes based on several risk and growth factors.
| Factor | Decreases the Multiple | Increases the Multiple |
|---|---|---|
| Provider Base | High reliance on a single owner | Multiple associate providers |
| Ancillary Services | None | In-office endoscopy or pathology |
| Growth | Stagnant or declining revenue | Consistent year-over-year growth |
| Payer Mix | High concentration in low-paying plans | Favorable commercial contracts |
An advisor9s job is to build a strong case for the highest possible multiple.
Planning for Life After the Sale
The transaction is just a moment in time. The structure of your deal will shape your future for years to come. Do you want to retire immediately, or do you see yourself practicing for a few more years? Many deals are structured to keep the physician-owner involved, often with an “equity rollover” that allows you to share in the future success of the larger group. This can create a highly lucrative “second bite at the apple.” Protecting your staff and ensuring your legacy of patient care continues are also critical outcomes. The right deal is not always the one with the highest headline price. It is the one that best aligns with your financial, professional, and personal goals.
Frequently Asked Questions
What is the current market like for selling a GI & Hepatology practice in Fort Lauderdale?
The Fort Lauderdale market for GI & Hepatology practices is very active with strong interest from private equity and strategic buyers. There is a competitive and mature healthcare environment with many gastroenterologists, creating a market where practices with unique strengths can attract premium offers.
How do private equity groups influence the sale of GI & Hepatology practices in Fort Lauderdale?
Private equity firms are major players in the South Florida GI market, actively acquiring practices to build platforms. Their involvement increases competition among buyers and often leads to higher valuations, but sellers should be prepared to negotiate with experienced deal professionals.
What factors can increase the value of a GI & Hepatology practice?
Several factors can increase valuation, including having multiple providers rather than being sole-owner dependent, offering ancillary services like an in-office endoscopy suite, having consistent revenue growth, and maintaining favorable commercial payer contracts. These elements demonstrate future cash flow potential and reduce buyer risk.
What are the typical steps in the process of selling a GI & Hepatology practice?
The sale process typically includes: 1) a thorough valuation, 2) preparation and organization of financials and operations, 3) confidential marketing to qualified buyers, 4) negotiating offers, and 5) due diligence, where buyers scrutinize all aspects of the practice before closing. Proper preparation is crucial to avoid challenges during due diligence.
What should I consider when planning for life after selling my practice?
Planning should address whether you intend to retire immediately or continue practicing for a while. Deal structures might include options like an equity rollover to participate in future growth. You should also consider protecting your staff and maintaining your patient care legacy. The best deal aligns with your financial, professional, and personal goals, not just the highest price.
