Guide to Selling a Neurology Practice in Chicago, IL

The market for neurology practices in Chicago is strong. Advances in treatment and a growing patient population have created significant demand from buyers like private equity firms and hospital systems. For you, this means opportunity. This guide provides a clear overview of the current landscape, what drives your practice’s value, and how to navigate the sale process to protect your financial future and legacy.

Chicago’s Neurology Market: A Seller’s Opportunity

If you are a neurology practice owner in Chicago, the timing for considering a sale has rarely been better. Several large-scale trends are converging to create a uniquely favorable environment for sellers. The market is not just active. It is strategically targeting well-run neurology groups.

High Demand Meets Innovation

A national shortage of neurologists is a key driver of value. This shortage is happening at the same time that new, effective treatments for conditions like migraines, epilepsy, and multiple sclerosis are coming to market. This creates a supply and demand imbalance that makes existing, efficient practices highly attractive. With over $1.1 billion in venture capital invested in neurology companies in 2023 alone, buyers have the capital and the mandate to acquire.

The Chicago Advantage

As a major U.S. healthcare hub, Chicago offers a dense and diverse patient population. Buyers look for practices with an established presence in such a competitive market. Your reputation, referral networks, and payer contracts in the Chicagoland area are significant assets. They represent a strategic foothold that is difficult and expensive for an outsider to build from scratch.

Key Considerations Beyond the Numbers

A successful sale is about more than just the final price. Its a major life transition. Before you even think about valuation, you need to consider what you want your future to look like. Are you looking to retire completely, or do you want to stay on and focus solely on clinical work without the administrative burden? Selling to a large hospital system provides different opportunities and challenges than partnering with a private equity group. One might offer stability and referrals, while the other might offer more resources for growth and a potential second payout down the road. Answering these personal questions is the true first step. It helps define what the “right” buyer and “right” deal structure look like for you.

Who is Buying Neurology Practices in Chicago?

The interest in your practice is likely to come from a few key types of buyers, each with different goals. Understanding their motivations is key to positioning your practice effectively. In the Chicago market, we see three primary groups actively acquiring:

1. Hospital Systems and Large Health Networks. These buyers are often looking to expand their service lines, secure referral streams, and increase their negotiating power with insurance companies. They can offer stability and access to a massive patient base.
2. Private Equity-Backed Platforms. PE firms see neurology as a growth sector. They acquire successful “platform” practices and then grow them by acquiring smaller, “tuck-in” practices. They provide capital and business expertise, often while allowing physicians to retain clinical autonomy and even some ownership.
3. Strategic Competitors. Larger, established private neurology groups in the region, like Northwest Neurology, may look to acquire smaller practices to expand their geographic footprint and talent pool.

Because the details of these transactions are almost always private, it is nearly impossible to know what the true market rate is without professional guidance. An advisor running a confidential, competitive process is the only way to ensure you are seeing the best offers the market can provide.

The Path to a Successful Sale

Selling your practice is a structured process, not a single event. It begins long before the first conversation with a buyer. The first step we take with clients is preparing the practice for sale. This means cleaning up financial statements, organizing key documents, and identifying opportunities to improve profitability before going to market. Once prepared, we establish a professional valuation to anchor negotiations. From there, we confidentially market the practice to a curated list of qualified buyers to create competitive tension. After negotiating the best offer, the most critical phase begins: due diligence. This is where the buyer verifies everything about your practice. A well-prepared practice sails through due diligence. A poorly prepared one can see its deal fall apart or the price re-negotiated downwards at the last minute.

How Your Neurology Practice is Valued

Forget simple rules of thumb like a multiple of your annual revenue. Sophisticated buyers value your practice based on its profitability and future cash flow, a metric called Adjusted EBITDA. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. “Adjusted” is the most important part of that term. It means we normalize your financials by adding back personal expenses run through the business or one-time costs that a new owner would not incur. This process reveals the true earning power of your practice. That Adjusted EBITDA figure is then multiplied by a “multiple” to determine the practice’s Enterprise Value.

The multiple isn’t a fixed number. It’s influenced by your practice’s size, provider mix, growth trajectory, and reliance on the founding physician. A multi-provider practice in a desirable Chicago suburb will command a higher multiple than a solo practice that is highly dependent on its retiring owner.

Planning for Life After the Sale

The day the transaction closes is not the end of the story. It is the beginning of a new chapter that you help write during negotiations. The structure of your sale has major implications for everything that follows. Do you want to receive all your cash upfront, or would you consider rolling over some of your equity into the new, larger company? An equity rollover allows you to cash out a second time, often for a much larger amount, when the new entity is sold again in 5-7 years. How will your staff be treated? Your role in their transition can be defined in the sale agreement. Finally, the way the deal is structured has a massive impact on your tax bill. Proper planning can significantly increase your net, after-tax proceeds. Defining these goals upfront is just as important as arriving at the right price.