Selling your practice is one of the most significant decisions of your career. In the current market, especially for Ortho & MSK practices in Columbus, the stakes are high and the opportunities are significant. Many owners we speak with are curious about their options but are unsure where to begin. This guide provides a clear overview of the market, the process, and the key questions you should be asking to prepare for a successful transition and maximize your value.
Market Overview
The Ortho & MSK sector is currently one of the most active areas for healthcare M&A. We are seeing strong consolidation across the country, and the Columbus market is no exception. This activity is driving up what buyers are willing to pay. In fact, on average, orthopedic practice valuations have seen a 12% increase over the past 24 months.
This is not a typical market. It is a seller’s market, where well-run practices are in high demand from sophisticated buyers like private equity groups and large strategic health systems. They are actively looking for practices in the Columbus area to build their platforms. Understanding this climate is the first step toward capitalizing on the opportunity.
Key Considerations for a Sale
A strong market does not guarantee a premium valuation. Buyers look for specific qualities that signal a healthy, growing, and low-risk business. Before you even think about putting your practice on the market, you should assess a few key areas of your operations. Preparing these areas in advance can have a major impact on your final offer.
What Buyers in Ohio Are Looking For
Integrated Service Lines
Practices with strong, built-in ancillary services are highly attractive. Buyers see these as indicators of a mature business with multiple revenue streams. They are specifically looking for practices with well-run physical therapy, imaging services, or an ambulatory surgery center (ASC).
Modern Operations
Is your practice running on modern technology? Have you started to explore or implement value-based care models? Buyers pay a premium for efficiency and forward-thinking operations. Practices that can demonstrate these capabilities are viewed as more scalable and better prepared for the future of healthcare.
A Unified Vision
If you are in a group practice, it is important that all partners are aligned on the goal of selling. We often see deals delayed or fall apart because partners have different expectations for the future. Getting on the same page about timing, valuation, and post-sale roles is a critical first step.
Market Activity
The primary drivers of activity in the Columbus Ortho & MSK space are private equity (PE) firms. These are not small buyers. They are looking for “platform” practices to invest in and grow. Typically, they seek practices with a minimum of $2 million to $3 million in annual EBITDA.
The market is also trending toward larger practices. Recent data shows that around 65% of transactions involved orthopedic groups with 10 or more physicians. This trend toward consolidation puts pressure on smaller, independent practices. It also creates a significant opportunity for owners who are prepared to engage with these larger, more sophisticated buyers. Finding the right buyer for your specific practice size and goals is key.
The Sale Process
Many physicians believe selling a practice is a quick event. The reality is quite different. You should plan for a process that takes 12 months or even longer from start to finish. In fact, if you want to sell in the next 2 to 3 years, the time to start preparing is now. A rushed process often leaves money on the table.
Here are the four main phases:
- Preparation and Team Assembly. This is where you gather your financial documents, clarify your goals, and assemble your team of advisors, including M&A, legal, and accounting experts. This phase should begin long before you speak to any potential buyers.
- Marketing and Buyer Engagement. A professional process involves confidentially marketing your practice to a curated list of qualified buyers. This creates competitive tension to ensure you receive the best possible offers, not just the first one.
- Due Diligence and Negotiation. Once you accept an offer, the buyer will begin a deep dive into every aspect of your practice. This is often the most demanding phase, where an experienced advisor is critical to manage the flow of information and protect your interests.
- Closing and Transition. This final stage involves executing legal documents and planning for the smooth transition of ownership, staff, and patients.
What Is Your Practice Really Worth?
Valuation is more than a simple formula. While a common approach is to apply a multiple to your earnings, determining the true value of your practice is much more nuanced. The key metric that sophisticated buyers use is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure normalizes your earnings for any owner-specific or one-time expenses to show the true cash flow of the business.
Many factors influence your valuation multiple. A practice that is well-prepared for sale can command a higher multiple than one that is not.
| Factor That Increases Value | Factor That Decreases Value |
|---|---|
| Strong Ancillary Services | High Owner Dependence |
| Multiple Providers/Locations | Poor Payer Mix |
| Documented Growth History | Outdated Technology |
For a well-established Ortho & MSK practice in today’s market, valuation multiples typically range from 6.0x to 8.5x Adjusted EBITDA. Getting an accurate, defensible valuation is the foundation of a successful sale.
Planning for Life After the Sale
The transaction itself is only part of the journey. What happens the day after you sell your practice? A successful transition requires planning for your personal, professional, and financial future well in advance. Without a clear plan, the post-sale period can be challenging.
Here are four things to consider:
- Your Future Role. Do you want to leave medicine entirely, or continue practicing as an employee? Be honest with yourself about whether you would be happy giving up autonomy in exchange for reduced administrative burdens. Your employment agreement will be a heavily negotiated document.
- Your Team’s Transition. Your staff is one of your practice’s greatest assets. A clear communication plan and strategy for retaining key employees are important for a smooth transition and for protecting the legacy you have built.
- Patient and Legal Notifications. You are legally required to notify patients of the change in ownership, typically 30-60 days in advance. You will also need to notify your insurance carriers and relevant state and federal agencies.
- Long-Term Liabilities. Your responsibility does not always end at closing. You will need a plan for who manages patient medical records and you must secure tail medical malpractice coverage to protect yourself from future claims.
Frequently Asked Questions
What is the current market trend for selling Ortho & MSK practices in Columbus, OH?
The market for Ortho & MSK practices in Columbus is very active and currently favors sellers. There is strong consolidation and a high demand from buyers like private equity groups and health systems, leading to an average 12% increase in practice valuations over the last 24 months.
What key factors do buyers look for when purchasing an Ortho & MSK practice in Columbus?
Buyers mainly look for practices with integrated ancillary services such as physical therapy, imaging, or ambulatory surgery centers, modern and efficient operations including value-based care models, and a unified vision among practice partners to ensure smooth transition and scalability.
How long does the process of selling an Ortho & MSK practice typically take?
Selling an Ortho & MSK practice usually takes about 12 months or longer. The process includes preparation, marketing, due diligence, negotiation, and closing stages. Starting preparations 2 to 3 years in advance is recommended for the best outcome.
What valuation multiples can Ortho & MSK practices expect in the Columbus market?
Valuation multiples for well-established Ortho & MSK practices in Columbus typically range from 6.0x to 8.5x Adjusted EBITDA. Adjusted EBITDA accounts for normalized earnings, excluding owner-specific or one-time expenses, providing a clearer picture of cash flow.
What should practice owners plan for after selling their Ortho & MSK practice?
After selling, owners should plan their future role, whether continuing as an employee or leaving medicine, manage the transition of their staff, communicate ownership changes to patients and legal entities, and arrange for long-term liabilities like managing medical records and tail malpractice coverage.