Guide to Selling a GI & Hepatology Practice in Wisconsin

Deciding to sell your medical practice is a significant milestone. For owners of a GI & Hepatology practice in Wisconsin, the current market presents unique opportunities, but a successful transition requires careful planning and a clear understanding of the process. This guide provides an overview of the key factors to consider, from initial valuation to post-sale planning, helping you navigate the path toward a rewarding exit.

Market Overview

The Wisconsin healthcare market is active. We are seeing a steady trend of consolidation driven by both hospital systems and private equity (PE) investors. For gastroenterology and hepatology practices, this activity is particularly strong. Why? Your specialty is attractive to buyers because of its consistent demand, favorable demographic trends, and high-volume procedural nature.

This environment means there are more potential buyers for your practice than ever before. However, it also means you will likely be dealing with sophisticated groups who know exactly what they are looking for. Competition among buyers can drive premium valuations, but only for practices that are properly prepared for the scrutiny that comes with a high-stakes transaction. Success in this market means understanding who the buyers are and what they value most.

Key Considerations for Wisconsin Sellers

Before you dive into the market, it is important to look inward at your practice. Sophisticated buyers will analyze more than just your top-line revenue. They will dig into specific operational, financial, and legal details.

Your Clinical Metrics

Buyers in this specialty look for clinical excellence. They will ask for performance data that goes beyond basic patient counts.
* Adenoma Detection Rates (ADR): This is a key quality indicator in colonoscopy.
* Cecal Intubation Rates: Another critical measure of procedural quality.
* Patient Recall Rates: Demonstrates a stable, recurring patient base for future screenings.

Your Financial Health

Your practice’s profitability is the foundation of its value. Buyers will want to see clean, organized financials that clearly show the practice’s true earning power. This goes beyond a simple profit and loss statement to include a deep dive into your revenue cycle management, billing, and collection processes.

Wisconsin State Regulations

Every state has its own rules. In Wisconsin, the Corporate Practice of Medicine Doctrine can affect how a deal is legally structured. Incorrect entity formation or a poorly structured sale can create significant legal and financial problems down the road. It is important to navigate these state-specific rules correctly from the very beginning.

Market Activity

What is driving the current M&A market? The biggest factor is the sustained interest from private equity firms. These groups are not just buying single practices. They are building large, regional, and national “platforms” by acquiring a strong initial practice and then adding smaller “tuck-in” acquisitions.

For a Wisconsin GI & Hepatology owner, this is important news. If your practice has multiple providers, efficient operations, and a strong reputation, you could be seen as an ideal platform. This status can command a premium valuation. These buyers bring a professional approach to the process. They move quickly, and they expect a high level of preparation from sellers. This dynamic has turned the M&A landscape into a seller’s market, but one that rewards readiness and punishes disorganization. The key is to position your practice to attract this type of buyer and create a competitive process.

The 4 Steps of a Successful Sale Process

Selling your practice is a structured process, not a single event. While every deal is unique, a well-managed sale generally follows a clear path that protects your confidentiality and interests. Thinking you can just wait for an offer often means leaving money on the table.

1. Preparation and Strategy
   This is where the most important work happens. It involves gathering your financial and operational data, identifying and fixing potential issues, and defining your personal goals for the sale. This is the phase where you answer the question, “I might want to sell in 2-3 years, what do I do now?” The answer is, you start preparing.

2. Valuation and Marketing
   A comprehensive valuation does more than give you a number. It builds the story of your practice’s value. Once you know your worth, we run a confidential marketing process. We dont just list your practice. We discreetly approach a curated list of the most qualified strategic and financial buyers.

3. Negotiation and Due Diligence
   This is where offers are received and negotiated. After an initial agreement is signed, the buyer begins due diligence, where they verify all the information about your practice. This is often where deals face challenges. With proper preparation, this stage can be smooth and efficient.

4. Closing and Transition
   Once due diligence is complete, the final legal documents are drafted and signed. The transaction is then officially closed. A well-planned process also includes a clear plan for transitioning the practice to the new owners, ensuring continuity for your patients and staff.

Understanding Your Practice’s Value

Many practice owners mistakenly believe their practice’s value is a simple multiple of their annual revenue. In today’s market, sophisticated buyers use a more precise metric: Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true, normalized cash flow.

We calculate this by taking your net income and adding back owner-specific personal expenses or non-recurring costs. A common objection I hear is, “My practice isn’t worth enough to sell.” Most of the time, that’s because the owner hasn’t gone through this process.

Here is a simplified example:

The final valuation is this Adjusted EBITDA figure multiplied by a number (a multiple) that is influenced by factors like your location, number of providers, growth history, and payer mix.

Planning for Life After the Sale

The final sale price is not the only thing that matters. The structure of the deal and your plan for the future are just as important. A successful transition is one where you feel secure in your decision and your legacy is protected.

• Your Future Role. Do you want to retire immediately, or would you prefer to continue practicing for a few years without the headaches of management? We help structure deals that match your personal and professional goals, addressing the common fear of losing control.

• Your Team’s Transition. You have likely spent years building a loyal and dedicated team. A key part of any deal is ensuring there is a clear plan for their future, which provides them with stability and protects the culture you built.

• Your Financial Future. Many deals today include components like rollover equity, where you retain a minority stake in the new, larger company. This can provide a “second bite of the apple,” giving you the potential for another significant payday when the larger platform is sold years later. Understanding these structures is key to maximizing your long-term financial outcome.

Planning for these elements in advance ensures your transition is not only profitable but also personally fulfilling.