Selling your Occupational Therapy practice is a major decision. For owners in New Orleans, navigating the process can feel complicated, especially when reliable information seems scarce. This guide provides a clear overview of the market, key steps, and what truly drives value for OT practices in our unique city. It is designed to give you the clarity needed to plan your next steps with confidence.
Market Overview: The New Orleans Landscape
If you have tried to find comparable sales for OT practices in the New Orleans area, you have likely noticed that public listings are few and far between. This is not a sign of a slow market. It is a sign of a discreet one.
An Opaque Market
Unlike other businesses, high-quality healthcare practices are often sold through private, confidential channels, not on public websites. Strategic buyers and private equity groups work with advisors to find practices that fit their specific growth plans. This means the most significant transactions are happening behind the scenes.
What This Means for You
This private market creates both a challenge and an opportunity. The challenge is that you cannot simply look up what a practice like yours sold for last month. The opportunity is that with the right preparation and representation, you can access a pool of serious, well-funded buyers who are actively looking for practices in the Gulf South but are invisible to the public. Your practice s reputation, referral relationships, and community standing in New Orleans are assets that these buyers value highly.
Key Considerations for OT Practice Owners
Before you dive into the process, it is important to assess your practice from a buyer’s perspective. For an Occupational Therapy practice in New Orleans, a buyer will look closely at a few specific areas:
- Referral Networks. How stable are your sources of new patients? A diversified network of referrals from various physicians, surgeons, and local health systems is a sign of a healthy, low-risk business.
- Therapist Team. A practice with a stable, credentialed team of OTs that can operate without being 100% dependent on the owner is far more valuable. High staff turnover is a red flag for buyers.
- Payer Contracts. Your mix of
private insurance, Medicare, and Louisiana Medicaid contracts directly impacts profitability and revenue stability. Well-negotiated contracts are a significant asset. - Growth Potential. Is your practice positioned to grow? This could mean having space for more therapists, opportunities for new service lines, or serving an expanding part of the metro area.
Market Activity: Who is Buying OT Practices in New Orleans?
While you will not see them on LoopNet, a variety of buyers are actively seeking to acquire or partner with OT practices in Louisiana. The key is understanding who they are and what they want, as this will shape the entire deal structure. Many of the best deals are made before a practice is ever officially “for sale.”
| Buyer Type | What They Look For | Implication for You as a Seller |
|---|---|---|
| Private Equity-Backed Platforms | Practices with strong EBITDA ($500k+) and a solid management team. They seek platforms for regional growth. | Highest valuations, but often require the owner to stay on for a transition period. Opportunity for rollover equity. |
| Local Hospital Systems | Practices that can fill a strategic need in their continuum of care, capturing patient referrals internally. | Offers can be competitive. The sale process may involve more bureaucracy. Your practice culture may change. |
| Regional Therapy Groups | Smaller, established OT/PT groups looking to expand their footprint in the New Orleans or Gulf Coast market. | These buyers understand your business well. The transition can be smoother and preserve more of your legacy. |
The Sale Process: A Simple Roadmap
Selling a practice is a structured process, not a single event. While every sale is unique, the journey generally follows a clear path. Knowing these steps helps remove uncertainty and ensures you are in control.
The process typically involves four main phases. First, we help you with preparation and valuation to understand your practice’s true worth. Second is the confidential marketing phase, where we connect you with qualified buyers without your staff or competitors knowing. Third, we guide you through negotiation and due diligence, where a buyer inspects your operations and financials. This is often where unexpected issues can arise. Finally, we manage the closing and transition, ensuring a smooth handover.
Valuation: What Is Your Practice Really Worth?
Many owners I speak with are not sure how to value their practice. They believe it is based on a simple percentage of revenue. The truth is, sophisticated buyers use a more precise formula: Adjusted EBITDA x a Market Multiple.
It Starts with Adjusted EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a proxy for your practice’s cash flow. We then “adjust” it by adding back expenses that will not continue under a new owner. These include your personal auto lease, discretionary travel, or an above-market salary you pay yourself. Correctly calculating this number is the foundation of your valuation.
Applying the Right Multiple
The multiple is a reflection of risk and opportunity. A larger, multi-therapist practice with a strong growth story will receive a much higher multiple than a small, owner-dependent one. For OT practices, multiples can range from 3.5x for smaller practices to over 7.0x for larger, more profitable groups.
Why a Professional Valuation Matters
Using an outdated rule of thumb can leave a significant amount of money on the table. A professional valuation tells a story with your numbers, justifies a premium multiple, and gives you the confidence to negotiate from a position of strength.
Post-Sale Considerations: Planning for What’s Next
The moment the sale closes is not the end of the story. It is the beginning of a new chapter for you, your staff, and your legacy. Thinking about this early in the process is critical for a successful outcome.
Your role after the sale is a key point of negotiation. Do you want to retire immediately, or would you prefer to stay on for a few years, focusing only on patient care without the administrative headaches? Many owners choose to “roll over” a portion of their sale proceeds into equity in the new, larger company. This provides an opportunity for a “second bite of the apple” when that larger entity is sold again in the future. We specialize in structuring deals that protect your legacy and your team, ensuring the practice you built continues to thrive.
Frequently Asked Questions
What should I know about the market for selling an Occupational Therapy practice in New Orleans?
The market for OT practices in New Orleans is opaque and discreet, with most transactions occurring privately, not publicly listed. This means serious buyers often find practices through private channels, valuing your reputation, referral relationships, and community standing.
What key factors do buyers consider when evaluating an OT practice in New Orleans?
Buyers focus on referral networks, therapist team stability, payer contracts mix, and growth potential. A diversified referral network, a stable and credentialed therapist team, well-negotiated insurance contracts, and clear opportunities for growth make a practice more valuable.
Who typically buys Occupational Therapy practices in New Orleans, and what do they look for?
Buyers include private equity-backed platforms, local hospital systems, and regional therapy groups. Private equity seeks strong EBITDA and management teams, hospitals want strategic fit for patient referrals, and regional therapy groups look for practices that complement their footprint, each influencing valuation and sale terms.
How is the valuation of an Occupational Therapy practice in New Orleans determined?
Valuation is based on Adjusted EBITDA multiplied by a market multiple, reflecting cash flow and risk/opportunity. Adjusted EBITDA accounts for discretionary expenses, and multiples range from 3.5x to over 7.0x depending on practice size and profitability. Professional valuations maximize sale price and negotiation power.
What should I consider for post-sale planning after selling my Occupational Therapy practice?
Post-sale planning involves deciding your role, whether retiring or staying on in a limited capacity, and considering rolling over part of proceeds into equity in the acquiring company. Proper planning ensures a smooth transition, protects your legacy, and supports your team and practice continuity.