Guide to Selling a Ortho & MSK Practice in Chicago, IL

Selling your Ortho & MSK practice is one of the most important decisions you will ever make. It is a journey with significant financial and personal implications. For practice owners in the competitive Chicago market, understanding the landscape, your practice’s true value, and the sale process is the first step toward a successful transition. This guide will walk you through what you need to know.

The Chicago Ortho & MSK Market Overview

The Chicago metropolitan area is a major hub for healthcare, and the Ortho & MSK sector is no exception. It is a mature and competitive market. We see consistent interest from both large hospital systems looking to expand their service lines and private equity-backed platforms seeking to build regional density. Recent affiliations, like Midland Orthopedic Associates partnering with Unity MSK, show this trend in action.

For an independent practice owner, this environment presents a dual reality. There are more potential buyers than ever before. But these buyers are sophisticated. They look for well-run practices with strong financials and clear growth potential. Standing out in a crowded market requires you to present your practice professionally and strategically.

Key Considerations Before You Sell

Thinking about a sale goes beyond just the numbers. It involves deep personal and operational questions. Your answers will shape your entire strategy.

Your “Why” and When

Are you planning for retirement, seeking a partner for growth, or feeling the pressure of burnout? Your reason for selling is the foundation of your exit plan. It is also important to be realistic about the timeline. A successful sale process often takes 12 months or more. Many owners tell us they plan to sell in 2-3 years. That is the perfect time to start preparing. Buyers pay for proven performance, not just future potential.

Your Emotional and Financial Readiness

A sale is a huge milestone. You have built this practice from the ground up. It is important to consider how you will feel as part of a larger organization and to have a clear plan for your life post-sale. A financial planner can help structure the proceeds to meet your future goals, but only you can decide what will bring you personal satisfaction.

Current Market Activity and Timing

The market for Ortho & MSK practices is active, largely driven by private equity investment. In a single recent year, nearly 400 physician practice transactions were completed. PE-backed platforms are consolidating practices to create economies of scale, and orthopedics is a prime target due to its high revenue and ancillary service potential, like physical therapy and ambulatory surgery centers (ASCs).

This activity creates a competitive environment. Multiple buyers may be interested in a well-positioned Chicago practice. This can drive up valuation multiples. However, this window of opportunity can shift with economic changes or market saturation. Timing your entry into the market is a critical decision that can have a massive impact on your final sale price.

The Sale Process Unpacked

A practice sale is not a single event. It is a multi-stage process that requires careful management. While every deal is unique, the journey typically follows a clear path from preparation to closing. A common stumbling block is buyer due diligence, where unexpected financial or compliance issues can derail a transaction. Proper preparation is the best way to ensure a smooth process.

Successfully navigating the sale requires a team of experienced professionals. You are the clinical expert, but you need business and legal experts in your corner.

What Is Your Chicago Practice Actually Worth?

Many owners mistakenly believe their practice’s value is a simple multiple of revenue. Sophisticated buyers, however, focus on profitability. The key metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure starts with your net income and adds back owner-specific costs like an above-market salary, personal vehicle leases, or other non-operational expenses. This gives a true picture of the practice’s cash flow.

That Adjusted EBITDA is then multiplied by a market-based number. For a practice with over $1M in EBITDA, this multiple can often range from 5.5x to 7.5x, or even higher for a highly desirable platform. The exact multiple depends on factors like your payer mix, your reliance on a single physician, your location in the Chicago area, and your growth story. We often find that practices are undervalued until their financials are properly adjusted and their story is framed for buyers.

Planning for Life After the Sale

The sale agreement is signed, but your transition is not over. Planning for what comes next is critical for protecting your legacy, your staff, and your financial future.

Staff and Patient Transition

Your team and your patients are your practice’s most valuable assets. A buyer’s primary concern is retaining them. Communicating the change clearly and reassuring everyone about the future is important. Legally, patients must have the option to transfer their records elsewhere, but a smooth transition, often with the selling physician staying on for a period, encourages them to stay.

Lingering Liabilities and Assets

Several items must be addressed during negotiations.
* Medical Malpractice: You will likely need to purchase a “tail” insurance policy to cover any claims that arise after the sale from your time as owner.
* Real Estate: If you own the practice’s building, you must decide whether to sell it with the practice or become the buyer’s landlord through a new lease agreement.
* Notifications: Federal and state agencies, payers, and liability carriers must all be notified of the change in ownership.

Each of these points involves negotiation and has lasting financial impact, underscoring the need for expert guidance from start to finish.