Now is a pivotal time for Ortho & MSK practice owners in Jacksonville. The market is dynamic, with both private equity and strategic health systems actively seeking acquisition opportunities. Navigating this landscape requires a clear understanding of your practice’s value and the factors driving deals today. This guide provides insights into market conditions, the sale process, and how to prepare for a successful transition.
Curious about what your practice might be worth in today’s market?
Market Overview
The demand for orthopedic and MSK services is strong, and it continues to grow. We see this driven by two main factors. First, our aging population naturally requires more orthopedic care. Second, an active lifestyle community in places like Jacksonville leads to more sports injuries. This underlying demand is attracting significant interest from investors. They are particularly drawn to practices that have embraced technological advances like robotic-assisted surgery or integrated telemedicine. This backdrop of steady growth and innovation makes well-run Jacksonville Ortho & MSK practices highly attractive assets in the current M&A climate.
Key Considerations for Sellers
Selling your practice is a major business transaction with serious implications. Getting it right involves careful management of several key areas.
Navigating Confidentiality
A premature leak about a potential sale can disrupt your practice. It can worry your staff and patients, and even alert competitors. A controlled, confidential process is critical to maintaining stability until a deal is finalized.
Regulatory and Compliance Hurdles
The healthcare sector faces increasing regulatory scrutiny. In Jacksonville, we saw Southeast Orthopedic Specialists pay a $4.4 million settlement related to False Claims Act allegations. Any potential legal or compliance issues must be identified and addressed before you go to market. A clean record is a must for sophisticated buyers.
Preparing for Due Diligence
The sale process can be a marathon, not a sprint. Seller fatigue is a real issue. Buyers will conduct deep due diligence, requesting extensive financial and operational documents. Being disorganized here can delay or even kill a deal. Preparation is everything.
Protecting your confidentiality while exploring sale options is critical.
Jacksonville’s Market Activity
The national trend of consolidation is an everyday reality in the Jacksonville market. In 2023, we saw an acceleration of orthopedic group deals nationwide, and our region is a key area of interest. We have seen major players like HOPCo actively partner with and acquire MSK providers, including Orthopaedic Associates of St. Augustine. At the same time, the recent restructuring of the Jacksonville Orthopaedic Institute (JOI) shows that the market is fluid, creating new opportunities for independent practices. This activity signals a clear message. Sophisticated buyers, from private equity firms to large strategic health groups, are in Jacksonville looking for quality practices to acquire.
Timing your practice sale correctly can be the difference between average and premium valuations.
The Sale Process Blueprint
A successful practice sale doesnft happen by accident. It follows a disciplined process designed to protect your interests and maximize your outcome. While every deal is unique, the core steps remain consistent.
- Assemble Your Advisory Team. You cannot do this alone. A successful sale requires a team of experts, including an M&A advisor, an accountant, and a lawyer, all with experience in healthcare transactions.
- Prepare for Scrutiny. This is the due diligence preparation phase. We work with clients to organize financial records, clean up the books, and create a secure data room. This ensures you are ready for any buyer’s request and project a professional, organized image.
- Tell Your Story. Buyers don’t just buy numbers; they buy a story of future growth. We help you create a compelling narrative and a professional executive summary that highlights your practicefs strengths, market position, and growth potential.
- Run a Competitive Process. The best offers come from creating competition. An advisor confidentially markets your practice to a curated list of qualified financial and strategic buyers, managing negotiations to drive up the price and improve the terms.
The due diligence process is where many practice sales encounter unexpected challenges.
Understanding Your Practice’s Value
One of the first questions every owner asks is, “What is my practice worth?” The answer is more complex than a simple revenue multiple. Sophisticated buyers value your practice based on its true cash flow, or Adjusted EBITDA. This figure starts with your net income and adds back interest, taxes, depreciation, and amortization. Then, we normalize the figure by adjusting for owner-specific expenses and any one-time costs to show the practice’s true underlying profitability. A market multiple is then applied to determine the Enterprise Value.
Here is a simplified example:
| Metric | Example Calculation | Result |
|---|---|---|
| Reported Net Income | $500,000 | |
| Add: Interest, Taxes, etc. | + $50,000 | |
| EBITDA | $550,000 | |
| Add: Owner Perks & Excess Salary | + $150,000 | $700,000 |
| Market Multiple | x 6.0 | |
| Estimated Enterprise Value | $4,200,000 |
The key is that the multiple isn’t fixed. It changes based on your practice’s size, provider mix, growth rate, and market conditions. Orthopedic practices often command premium multiples, but securing them requires a professional valuation and a competitive sale process.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
A successful exit is about more than the final sale price. It’s about ensuring your legacy is protected, your team is secure, and your financial future is structured intelligently. This planning should start long before you sign a purchase agreement.
Your Legacy and Your Team
For many owners, the practice is their life’s work and the staff is like family. The right deal structure and the right partner will honor that. We help you negotiate terms that protect your staff and ensure the practice’s culture of patient care continues.
Your Financial Future
The structure of your sale has massive tax implications. How the deal is allocated between assets and goodwill can significantly change your net, after-tax proceeds. Furthermore, many deals today include an option for the seller to “roll over” a portion of their equity into the new, larger company. This provides cash at close while creating an opportunity for a second, often larger, financial return when the new parent company is sold years later.
Your Next Chapter
What do you want to do after the sale? Some physicians want to retire immediately. Others want to continue practicing with less administrative burden. And some want to take a leadership role in the larger organization. Defining your personal goals is a key part of finding a buyer whose vision aligns with yours.
The right exit approach depends on your personal and financial objectives.
Frequently Asked Questions
What factors are currently driving the high demand for Ortho & MSK practices in Jacksonville?
The demand is driven by Jacksonville’s aging population, which naturally requires more orthopedic care, and the active lifestyle community that leads to more sports injuries. Additionally, technological advances like robotic-assisted surgery and integrated telemedicine make these practices attractive to buyers.
How important is confidentiality during the sale process of an Ortho & MSK practice?
Maintaining confidentiality is critical to prevent disruption within the practice. A premature leak can cause concern among staff and patients and alert competitors, potentially jeopardizing the sale. A controlled and confidential process helps maintain stability until the deal is finalized.
What steps should I take to prepare my practice for sale in Jacksonville?
You should assemble an advisory team including an M&A advisor, accountant, and lawyer with healthcare transaction experience. Prepare for due diligence by organizing financial records, cleaning up books, and creating a secure data room. Also, develop a compelling narrative highlighting your practice’s strengths and growth potential to attract competitive offers.
How is the value of an Ortho & MSK practice determined in the Jacksonville market?
Practice value is based on Adjusted EBITDA, which starts with net income and adds back interest, taxes, depreciation, amortization, owner-specific expenses, and one-time costs. A market multiple is then applied. For example, an EBITDA of $700,000 multiplied by a 6.0 market multiple could estimate an enterprise value of $4.2 million.
What are important considerations for life after selling my Ortho & MSK practice?
Planning should start early and include protecting your legacy and team by negotiating deal terms that support staff and culture. Understand the tax implications of the deal structure. Consider options like equity rollover for future financial returns. Also, define your personal goals post-sale, whether that’s retiring, reducing administrative duties, or taking a leadership role in the new organization.