Selling your Occupational & Hand Therapy practice is one of the most significant financial decisions you will ever make. For owners in Denver’s unique market, the opportunity to achieve a premium valuation is strong, but it’s not automatic. This guide provides a clear overview of the key factors that influence your practice’s value and the steps you can take to prepare for a successful exit. Understanding these dynamics is the first step toward maximizing your return.
A Strong Market for Therapy Practices in Denver
The Denver market presents a powerful combination of factors that make it an attractive environment for selling an Occupational and Hand Therapy practice. Buyer interest, from both private equity groups and larger strategic health systems, is driven by clear, sustainable trends. They are not just looking for practices; they are looking for well-run practices in growth-centric locations like Denver.
here what makes the local market so compelling:
Robust Population Growth
Denver continues to be a magnet for new residents, and its overall population is expanding and aging. This demographic shift directly increases the patient base in need of post-surgical rehabilitation, ergonomic assessments, and specialized hand therapy.
A Healthy Economic and Workforce Climate
The U.S. physical therapy market is projected for significant growth, and Denver is a prime beneficiary. The Denver-Aurora-Lakewood area boasts a strong pool of skilled occupational therapists, making it easier for a new owner to recruit and retain the talent needed for expansion.
Beyond the Numbers: Key Considerations for Your Practice
A buyer is not just acquiring your equipment and patient list; they are investing in your practices unique position in the market. For an Occupational and Hand Therapy clinic, this value is often held in intangible assets that a standard financial statement cannot capture. The most successful sales occur when owners can clearly articulate and prove the strength of these areas.
You should be prepared to answer detailed questions about your referral networks, particularly the stability of relationships with local orthopedic surgeons and specialty clinics. Equally important is your team. Buyers will place a high premium on a practice with experienced Certified Hand Therapists (CHTs) who are likely to remain after the transition. If your practice is heavily dependent on you for patient care and key relationships, developing a plan to demonstrate its sustainability without you is critical.
Understanding Current Market Activity
While the market is strong, you won’t find a “Zillow” for therapy practices. Specific transaction data for your specialty in Denver is not public knowledge. This is why many owners who receive an unsolicited offer often leave money on the table. They have no way to know if it reflects true market value. The key to unlocking the best price and terms is to create a competitive environment. This is the difference between simply listing a practice and running a professional M&A process.
| Approach | The Reactive “Listing” | The Proactive “M&A Process” |
|---|---|---|
| Reach | Relies on public ads and a local network. | Accesses a proprietary database of qualified national and regional buyers. |
| Competition | Often results in a single, one-off offer. | Creates competitive tension with multiple bidders simultaneously. |
| Confidentiality | Higher risk of exposure to staff, patients, and competitors. | Managed under strict confidentiality agreements from the start. |
| Outcome | Accepts the first “good enough” offer. | Secures the best possible valuation and terms. |
Navigating the Sale Process
A successful practice sale is a marathon, not a sprint. It begins long before the practice is ever presented to potential buyers. The process starts with a thorough self-assessment and the organization of your financial and operational data into a clear, compelling story. We find that owners who begin this preparation 12 to 24 months before their target sale date achieve the best outcomes. From there, the process moves through several key stages: confidential marketing to a curated list of buyers, negotiating initial offers, and then entering the most critical phase: due diligence. This is where a buyer will scrutinize every aspect of your practice. Being thoroughly prepared here is what separates a smooth closing from a failed deal.
What Is Your Practice Really Worth?
The most common question we get is, “What’s my practice worth?” The answer is more complex than a simple multiple of your revenue. Sophisticated buyers value your practice based on its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow. It is calculated by taking your net income and adding back owner-specific perks (like a non-essential car lease), above-market owner salary, and other one-time expenses.
This Adjusted EBITDA is then multiplied by a number (the multiple) that can range from 3.0x to over 7.5x. What determines that multiple?
- Scale and Provider Mix. Practices with higher EBITDA and multiple providers, especially those with associate therapists driving revenue, command higher multiples than a solo, owner-dependent clinic.
- Growth Profile. A track record of consistent growth and clear avenues for future expansion (like adding a location or service line) will earn a premium valuation.
- Risk Factors. The stability of your referral sources, patient retention rates, and payer mix all influence a buyer’s perception of risk, which directly impacts the multiple they are willing to pay.
Planning for Life After the Sale
The final sale price is only one part of the story. How the deal is structured will define your role during the transition, the future for your long-time staff, and the amount of money you actually take home after taxes. Will you stay on for six months or two years? Will your key therapists be offered incentives to stay? Is the deal structured as an asset or stock sale? Each of these decisions has massive financial and personal implications. Planning for them upfront ensures your exit is on your terms and that you are prepared for the next chapter, both professionally and financially.
Frequently Asked Questions
What makes Denver a strong market for selling Occupational & Hand Therapy practices?
Denver has robust population growth and a healthy economic and workforce climate. The growing and aging population increases demand for therapy services, while the local pool of skilled occupational therapists supports practice growth and expansion.
How can I maximize the valuation of my Occupational & Hand Therapy practice in Denver?
Maximize valuation by demonstrating strong referral relationships, having experienced Certified Hand Therapists (CHTs) on your team, and reducing dependency on the owner. Also, prepare comprehensive financial and operational data and engage in a competitive M&A process to attract multiple buyers.
What is the best approach to selling my therapy practice in Denver to get the highest price?
The proactive M&A process is best because it accesses a database of national and regional qualified buyers, creates competitive bidding tension, ensures confidentiality, and typically secures better valuation and terms compared to simply listing the practice locally.
What financial metrics do buyers use to value Occupational & Hand Therapy practices?
Buyers primarily value practices based on Adjusted EBITDA, which reflects true cash flow. This figure is multiplied by a valuation multiple (ranging from 3.0x to 7.5x), influenced by factors like practice scale, provider mix, growth profile, and risk factors such as referral stability and patient retention.
What should I consider when planning for life after selling my therapy practice?
Consider the deal structure (asset vs. stock sale), your role during transition (duration and involvement), incentives for key staff to stay, tax implications, and how these factors align with your personal and financial goals to ensure a smooth exit and secure future.