Selling your oncology practice is one of the most significant financial and professional decisions you will ever make. For owners in Columbus, Ohio, the current market presents unique opportunities, but it also brings complexities that require informed navigation. This guide provides a clear overview of the landscape, from understanding your practice’s true value to planning for your legacy. The goal is to provide clarity on the path forward.
Curious about what your practice might be worth in today’s market?
Market Overview
The Columbus healthcare market is active and sophisticated. Oncology, in particular, is a vertical drawing intense interest from a wide range of buyers. Understanding this landscape is the first step toward a successful transition.
A Competitive Landscape
You are not selling into a vacuum. The buyers in the Columbus market are diverse, each with different motivations. They include local hospital systems looking to expand their cancer service lines, large private oncology groups seeking to increase their footprint, and corporate entities backed by private equity. National players like The US Oncology Network and American Oncology Network are actively consolidating practices, and their presence in the region creates a competitive environment. This competition can be a great advantage for a seller. It can also be overwhelming without a clear strategy.
The Push for Consolidation
Why the surge in interest? Consolidation offers buyers increased negotiating power with payors and drug manufacturers, operational efficiencies, and the ability to expand patient access. For independent practice owners, this trend presents both a challenge and an opportunity. While it becomes harder to compete independently, it also means that well-run practices are valuable strategic assets for these larger groups. Your practice could be the key to a larger organization’s growth in Central Ohio.
Key Considerations for a Sale
A successful sale starts long before your practice is officially on the market. We find that many owners believe they should wait until they are 2-3 years from selling to begin this process. Thats a mistake. Buyers pay for proven performance, not just potential. Preparing now allows you to sell on your terms, not theirs. Here are three critical areas to focus on.
- Your Financial Health and Story
Buyers will look much deeper than your top-line revenue. They will scrutinize your profitability, specifically your Adjusted EBITDA. This means normalizing your financials to reflect the true cash flow of the business, accounting for owner-specific perks or above-market salaries. It also means crafting a narrative around your numbers that highlights your payer mix, patient volume, key services, and growth potential. - Your Team and Legacy
A buyer isn’t just acquiring assets; they are acquiring your team and your reputation in the Columbus community. What is the plan for your key staff? How will your legacy of patient care be preserved? Answering these questions is not only important for your peace of mind but is also a key part of the value proposition for buyers who want a seamless transition. - Your Legal and Structural Readiness
Your practice’s legal structure, employment agreements, and key contracts will all be examined during due diligence. Cleaning these up beforehand prevents last-minute surprises that can delay or even kill a deal. This includes ensuring all compliance and corporate records are in order.
Understanding your practice’s current market position is the first step toward a successful transition.
Market Activity
The talk of consolidation is not abstract. It is happening now, and at a significant scale. Private equity firms and large strategic corporations see oncology as a prime area for investment. To put this in perspective, Ohio-based Cardinal Health recently invested $1.1 billion to acquire a group of community cancer practices. This was not a deal for a single, massive hospital system. It was for a collection of community-based specialty practices, very much like yours. This level of investment sends a clear signal to the market: independent oncology practices in strong communities like Columbus are highly sought-after strategic assets. This activity creates a competitive tension that, when managed correctly, can drive premium valuations for practice owners.
The Sale Process
A practice sale is a marathon, not a sprint. From the initial decision to prepare for a sale to the day the funds are in your account, the process often takes 12 months or more. It is a structured journey with distinct phases, each requiring careful management to protect your interests and maximize value. We find the due diligence phase is where many sales encounter unexpected challenges. Proper preparation can prevent this.
| Phase | Typical Duration | Key Activities |
|---|---|---|
| Preparation & Valuation | 1-3 Months | Financial cleanup, Adjusted EBITDA calculation, narrative building. |
| Confidential Marketing | 2-4 Months | Identifying and approaching qualified buyers under strict non-disclosure. |
| Negotiation & LOI | 1-2 Months | Evaluating offers, selecting a partner, and signing a Letter of Intent (LOI). |
| Due Diligence & Closing | 3-6 Months | Buyer’s deep review of financials, operations, and legal. Final contracts. |
The due diligence process is where many practice sales encounter unexpected challenges.
Understanding Your Practice’s Valuation
One of the first questions any owner asks is, “What is my practice worth?” Many have heard simple rules of thumb based on a percentage of annual revenue. This approach is outdated and almost always undervalues a practice. Sophisticated buyers, especially private equity firms, do not value you on revenue. They value you on profitability.
The key metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Think of it as your practice27s true, normalized cash flow. We arrive at this number by taking your net income and adding back owner-specific costs that a new owner would not incur, like a vehicle lease, personal travel, or an above-market owner salary. Most practices are undervalued until this process is done correctly.
This Adjusted EBITDA figure is then multiplied by a number (the “multiple”) to determine your practice’s enterprise value. That multiple isn’t random. It is influenced by your specialty, the scale of your practice, your reliance on a single provider, and your potential for growth. Crafting the right story around these factors is just as important as the numbers themselves.
Physicians who understand EBITDA optimization typically achieve 25-40% higher valuations.
Post-Sale Considerations
The transaction closing is a beginning, not an end. The structure of your deal has major implications for your financial future, your professional role, and the legacy you leave for your staff and patients. Planning for this new beginning is a critical part of the sale process.
Your Financial Future
Not all proceeds are delivered as cash at closing. Many deals include an “earnout,” where you receive additional payments for hitting performance targets post-sale. You may also have the opportunity to “rollover” a portion of your equity into the new, larger entity. This gives you a potential second financial gain when that larger entity is sold again down the road. Structuring these components and planning for the tax implications is key to maximizing your net, after-tax proceeds.
Your Ongoing Role
Selling your practice does not always mean retiring immediately. Many buyers want the selling physician to remain for a transition period, often 2-5 years. This provides continuity for patients and staff. A deal can be structured to protect your clinical autonomy, ensuring you continue to practice medicine the way you want to, free from the administrative burdens of ownership. Control does not have to be an all-or-nothing proposition.
Your Team’s Transition
You have likely spent years, if not decades, building your team. Ensuring they are treated well during and after the transition is a top priority for most owners. The right partner will see your staff as a valuable asset and will have a clear plan to retain and integrate them. This is a key point of negotiation and a hallmark of a successful, legacy-focused transition.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What makes the Columbus, OH market unique for selling an oncology practice?
The Columbus healthcare market is active and sophisticated, with diverse buyers including local hospital systems, private oncology groups, and corporate entities with private equity backing. National players consolidating practices add competitive tension, benefiting sellers with well-run practices.
Why is there a surge in interest from buyers for oncology practices in Columbus?
The push for consolidation drives interest as buyers seek increased negotiating power, operational efficiencies, and expanded patient access. Independent practices that are well-run are valuable strategic assets for larger groups aiming to grow in Central Ohio.
What are critical considerations before putting an oncology practice on the market?
Key areas include: 1) Financial health focusing on normalized Adjusted EBITDA and crafting a compelling financial narrative; 2) Team and legacy planning to ensure smooth transition and reputation preservation; 3) Legal and structural readiness by cleaning up contracts, compliance, and corporate records to avoid transaction delays.
How is the value of an oncology practice in Columbus determined?
Valuation is centered on Adjusted EBITDA, which reflects true cash flow by normalizing for owner-specific costs. This figure is multiplied by a specialty- and growth-influenced multiple to determine enterprise value. Understanding and optimizing EBITDA can increase valuation by 25-40%.
What post-sale considerations should oncology practice owners in Columbus keep in mind?
Post-sale planning includes: structuring deal proceeds with potential earnouts and equity rollovers; defining the seller’s ongoing clinical role, often spanning 2-5 years for continuity; and ensuring the practice team‚Äôs retention and integration, preserving the seller’s legacy and staff welfare during transition.
