Guide to Selling a GI & Hepatology Practice in Ohio

The market for Gastroenterology and Hepatology practices in Ohio is more active than ever. Driven by private equity investment and large-scale consolidation, practice owners have a significant opportunity to realize the value of their life’s work. However, navigating this landscape requires careful preparation and strategic insight. This guide provides a clear overview of the market, key considerations for selling, and how to position your practice for a successful transition.

Curious about what your practice might be worth in today’s market?

Market Overview

If you own a GI & Hepatology practice in Ohio, you are in a strong position. The current market is defined by two powerful forces: consolidation and high investor interest. This is not a fleeting trend. It is a fundamental shift in how healthcare is managed and funded. Understanding these dynamics is the first step in any long-term planning, whether you plan to sell in one year or five.

The Rise of Private Equity

Private equity (PE) firms and large strategic buyers see immense value in the GI sector. They are actively acquiring and partnering with Ohio practices to build regional and national platforms. This influx of capital creates a competitive buyer market, which often leads to more attractive valuations for well-prepared sellers.

The Consolidation Wave

Independent practices are increasingly joining larger Management Service Organizations (MSOs) or health systems. Companies like Gastro Health and One GI are expanding their footprint across Ohio. For practice owners, this trend presents both an opportunity for a lucrative exit and a potential threat of being outcompeted if they choose to remain independent without a clear growth strategy.

Key Considerations

Selling your practice is more than a financial transaction. It’s a decision that affects your patients, your staff, and your personal legacy. As you consider a sale, you will face critical questions about the future. How much clinical autonomy will you retain? What will the deal structure look like, and what are the tax implications? How can you ensure your dedicated staff are taken care of during the transition? Answering these questions requires a clear understanding of your goals and a strategy to negotiate terms that protect what is most important to you.

Your legacy and staff deserve protection during the transition to new ownership.

Market Activity in Ohio

The theoretical trends are visible in recent, concrete transactions right here in Ohio. The pace of acquisitions demonstrates a robust and active market where well-run GI practices are a prized asset. This activity provides a clear signal that buyers are paying premiums for practices that can help them achieve scale and clinical excellence.

The Sale Process

A successful practice sale does not happen by accident. It follows a structured process designed to maximize value while minimizing disruption and protecting your confidentiality. It begins long before the practice is ever presented to a buyer, with careful financial preparation and operational analysis. The next steps involve identifying the right pool of potential buyers, creating competitive tension to drive up offers, and skillful negotiation of the deal terms. The final phase, due diligence, is where many deals fail due to poor preparation. A well-managed process anticipates buyer questions and has the data ready, ensuring a smooth path to closing.

The due diligence process is where many practice sales encounter unexpected challenges.

Determining Your Practices Value

Many physicians believe their practices value is based on a simple multiple of revenue. The truth is that sophisticated buyers value your practice based on its profitability and future growth potential. The single most important metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow, and its what buyers are willing to pay for.

At SovDoc, we find that most practices are undervalued until their financials are properly normalized. We start by calculating a baseline EBITDA and then make adjustments to tell the full story. For instance, we normalize owner compensation to market rates and add back one-time expenses that a new owner would not incur.

Several key factors determine the final valuation multiple applied to your Adjusted EBITDA:
1. Scale and Provider Mix: Practices with multiple providers and an EBITDA over $1M typically command higher multiples than solo-physician practices.
2. Growth Profile: A history of consistent growth and clear future opportunities, such as adding ancillary services, increases perceived value.
3. Payer Contracts: Stable, in-network contracts are viewed more favorably than a high reliance on a few volatile referral sources.
4. Clinical Infrastructure: Use of modern EMRs, efficient scheduling systems, and a well-trained staff all contribute to a higher valuation.

A comprehensive valuation is the foundation of a successful practice transition strategy.

Life After the Sale

Closing the deal is not the end of the story. Your transition plan should clearly define your role, responsibilities, and compensation in the years following the sale. For many physicians, a key goal is to offload administrative burdens while retaining clinical leadership. You also need a plan to ensure your staff understands their future with the new organization, which is critical for retention and continuity of care. The structure of your deal might also include an earn-out or a chance to roll over equity into the new, larger company. These elements can provide significant future upside, but they require careful planning during the initial negotiations.

The right exit approach depends on your personal and financial objectives.