The market for gastroenterology and hepatology practices is incredibly active. For practice owners in New Hampshire, this presents a significant opportunity. Understanding the current landscape is the first step toward a successful sale. This guide offers insights into market conditions, valuation drivers, and key considerations for navigating your practice transition, helping you capitalize on strong demand and strategic timing.
New Hampshire Market Overview
New Hampshire presents a uniquely strong environment for GI and hepatology practice owners considering a sale. The states demographics, particularly an aging population, naturally drive sustained demand for gastroenterology services. This local need is amplified by a well-documented nationwide shortage of GIs, making established, efficient practices in the Granite State highly attractive to buyers.
This is not a new trend. Demand for core services like colonoscopies has historically outpaced capacity in the state. For a potential buyer, this signals a stable patient base and a clear path for future growth. Acquirers, from regional health systems to private equity groups, are not just buying a practice. They are buying a foothold in a market with built-in, long-term demand.
Key Considerations for a Successful Sale
When preparing your GI practice for a sale, buyers will look closely at three core areas. Getting these right is not just about securing a deal. It is about maximizing its value.
Financial Health and Stability
Your practice’s value is rooted in its financial performance. Buyers need to see clean, detailed financial statements that show consistent revenue and profitability. The key metric is Adjusted EBITDA, not just net income. We help owners normalize their financials by accounting for personal expenses or above-market owner salaries to show the practice’s true earning power. Strong referral relationships and a healthy payer mix are also viewed as valuable assets that demonstrate revenue stability.
Operational Excellence
A smooth-running operation reduces a buyer’s perceived risk. This includes having a well-trained and stable staff, modern and well-maintained equipment, and any relevant accreditations. Clearly defined patient care models and efficient workflows show that the practice can maintain its quality and profitability through a transition.
Strategic Market Position
What makes your practice unique in New Hampshire’s GI landscape? Buyers want to understand your competitive advantage. This could be a strategic location with a favorable demographic, a reputation for high patient satisfaction, or specialized services that other local practices do not offer. Articulating this story is a critical part of the sale process.
National Trends Influencing New Hampshire Market Activity
You cannot look at the New Hampshire market in isolation. The single biggest trend impacting GI practice sales today is consolidation driven by private equity and large strategic buyers. These groups are actively seeking to build regional and national platforms, and they view established, profitable practices as ideal building blocks.
While details of specific sales in New Hampshire are often confidential, the national picture tells the story. For example, Cardinal Health’s recent investment in GI Alliance, one of the largest gastroenterology groups in the country, was a multi-billion dollar transaction. This shows the immense capital flowing into the sector. For an independent practice owner, this is not a threat. It is the primary source of premium valuations. These buyers have the capital and incentive to pay for well-run practices that can help them grow.
Understanding the Sale Process
Selling a practice is a structured process, not a single event. While every deal is unique, a successful transaction typically follows a clear path. Preparing in advance for each stage gives you control and leverage.
- Preparation and Valuation. This is the foundational step and should begin 1-2 years before you plan to sell. It involves cleaning up financials, optimizing operations, and getting a formal, defensible valuation. Buyers pay for proven performance, not last-minute fixes.
- Confidential Marketing. An advisor confidentially presents your practice’s story and financial highlights to a curated list of qualified buyers. This protects your staff and reputation while creating a competitive environment to drive up the price.
- Negotiation and Letter of Intent (LOI). Once offers are received, we help you negotiate the key terms, including price, structure, and employment agreements. The goal is to sign an LOI with the best-fit buyer.
- Due Diligence. This is the most intensive phase. The buyer will conduct a deep dive into your financials, contracts, and operations. This is where most deals face challenges. Proper preparation is critical to prevent surprises that could lower the price or kill the deal.
- Closing and Transition. After completing legal documentation, the sale is finalized. A well-designed transition plan ensures a smooth handover for you, your staff, and your patients.
How Your GI Practice is Valued
A common question we hear is, “What is my practice worth?” The answer is more complex than a simple rule of thumb. Sophisticated buyers value your practice based on its Adjusted EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. This figure represents the true cash flow of the business after normalizing for owner-specific expenses. That Adjusted EBITDA figure is then multiplied by a number, the “multiple,” to determine the enterprise value.
That multiple is not a fixed number. It changes based on the quality and risk profile of your practice. Buyers pay a premium for scale, stability, and growth potential. Here are some of the key factors that determine your valuation multiple:
| Valuation Factor | Low Multiple | High Multiple |
|---|---|---|
| Provider Model | Owner-dependent; solo provider | Associate-driven; multiple providers |
| Annual EBITDA | Under $500k | Over $1M+ |
| Growth Profile | Stable or flat revenue | Demonstrable year-over-year growth |
| Ancillary Services | Limited to core GI services | In-house pathology, infusion, etc. |
| Referral Base | Concentrated; few key sources | Diverse and well-established |
Planning for Life After the Sale
The transaction is not the finish line. A successful exit strategy includes a clear plan for what comes next, for both you and your practice. The decisions made during negotiations will shape your future for years to come.
Your Role and Legacy
Do you want to retire immediately, or do you see yourself working for a few more years? Your desired role post-sale is a key negotiating point. Many buyers want the selling physician to stay on to ensure a smooth transition. We help structure agreements that align with your personal goals while also protecting the legacy you have built for your staff and patients. This is about ensuring the practice continues to thrive under new ownership.
Financial and Tax Structure
How your sale is structured has major implications for your after-tax proceeds. An asset sale is taxed differently than an entity sale. Furthermore, many deals with sophisticated buyers include an “equity rollover,” where you retain a minority stake in the new, larger company. This can provide a “second bite of the apple,” which can be immensely valuable when the larger group sells again in the future. Planning for this requires expert tax and financial guidance from the start.
Frequently Asked Questions
What makes New Hampshire a good market for selling a GI & Hepatology practice?
New Hampshire has a strong market due to its aging population which drives sustained demand for gastroenterology services. Additionally, there is a nationwide shortage of gastroenterologists (GIs), making well-established practices in the state highly attractive to buyers. The stable patient base and demand for procedures such as colonoscopies signal future growth potential.
What financial aspects should a practice owner focus on to maximize the sale value?
Owners should ensure clean, detailed financial statements highlighting consistent revenue and profitability. The key financial metric buyers focus on is Adjusted EBITDA, which normalizes earnings by accounting for personal expenses or above-market salaries. A strong referral base and diverse payer mix also demonstrate revenue stability and add value.
How important is operational excellence when selling a GI practice in New Hampshire?
Operational excellence is crucial as it lowers perceived buyer risk. Important factors include having a stable, well-trained staff, modern equipment, relevant accreditations, and efficient workflows. A practice that can maintain quality patient care and profitability during transition is more attractive to buyers.
What does the sale process typically involve for a GI & Hepatology practice?
The sale process consists of several stages: Preparation and valuation 1-2 years before sale, confidential marketing to qualified buyers, negotiation and signing of a Letter of Intent (LOI), due diligence where buyers review detailed practice information, and finally closing and transition with legal documentation and a smooth handover plan.
What should a seller consider about their role and financial planning post-sale?
Sellers should decide whether they want to retire immediately or continue working for a transition period, as this affects negotiations. Financially, understanding different sale structures (asset vs. entity sale) and the potential for equity rollover in the buying company is vital. Expert tax and financial advice is recommended to optimize after-tax proceeds and plan for life after the sale.
