Selling your Ortho & MSK practice is one of the most important financial decisions of your career. In Nebraska, the current market presents unique opportunities for prepared owners. This guide provides a clear overview of the market, key steps in the sale process, and how to think about your practice’s value. We will help you understand the path forward so you can make the best choice for your future, your staff, and your legacy.
Curious about what your practice might be worth in today’s market?
Market Overview
The Nebraska market for Ortho & MSK practices is active. We are seeing a healthy mix of local consolidation and outside investor interest, signaling strong demand. For example, the 2023 private equity investment in OrthoNebraska shows that sophisticated buyers see significant value and growth potential in our state. This creates a favorable environment for practice owners considering a sale. However, this demand also means buyers are more discerning. They look for well-run practices with stable referral bases and clear growth paths. For you, this means that a practice positioned correctly can attract premium attention, but preparation is key to standing out.
Key Considerations for Your Nebraska Practice
Beyond the numbers, buyers look closely at the underlying structure and stability of your practice. Focusing on these areas before you go to market can significantly impact a buyers interest and the final valuation.
Referrals and Payer Mix
A diverse and stable referral network is one of your most valuable intangible assets. Buyers want to see that patient flow is not dependent on a single source that could disappear after the sale. Likewise, a healthy mix of insurance payers demonstrates resilience. Documenting these referral patterns and your payer concentrations is a critical preparatory step.
Your Team’s Stability
Your experienced staff and management team are a major asset. A potential buyer sees a stable team as a sign of a healthy culture and operational continuity, reducing their post-acquisition risk. An organizational chart and highlighting the tenure of key staff can help tell this story. Planning for how to communicate the transition to your staff is just as important.
The Real Estate Question
If you own your building, you have a major decision to make. Will you sell the real estate with the practice, or would you prefer to become a landlord and lease it back to the new owner? Each path has different financial and tax implications. Thinking through this choice early on prevents it from becoming a roadblock during negotiations.
The structure of your practice sale has major implications for your after-tax proceeds.
Market Activity
Nationally, the Ortho & MSK space is seeing significant consolidation, and Nebraska is part of that trend. We’ve seen local practices merge to build scale and private equity groups invest to create regional platforms. What does this mean for you? It means there is an active pool of buyers looking for practices just like yours. These groups are often looking to grow their footprint and are willing to pay for well-managed, profitable practices. This climate of activity creates a window of opportunity. However, it also raises the stakes, as these professional buyers conduct rigorous due diligence. Timing your entry into this market correctly is a strategic decision that can influence your final outcome.
The Sale Process Unpacked
Many owners think about selling only when they are ready to exit. The most successful transitions, however, begin two to three years before a potential sale. A structured process not only maximizes value but also protects you from common pitfalls. It generally takes 6-12 months to complete and follows four main stages.
- Preparation and Valuation. This is the foundational stage. Here, you work with advisors to analyze your financials, normalize your earnings, and establish a clear, defensible valuation. This is also when you assemble your legal and financial team.
- Confidential Marketing. Your advisor will create marketing materials that tell your practice’s story and highlight its strengths. They then present the opportunity to a curated list of qualified buyers under strict confidentiality.
- Negotiation and Due Diligence. After receiving initial offers, you negotiate terms with the best-fit buyer. Once a Letter of Intent is signed, the buyer begins a deep dive into your practice’s financials, operations, and legal compliance.
- Closing and Transition. This final stage involves finalizing legal documents, transferring assets, and managing the announcement to your staff and patients. A clear plan for your post-sale role, if any, is critical for a smooth handover.
The due diligence process is where many practice sales encounter unexpected challenges.
How Your Practice is Valued
A practice’s valuation is more than just a multiple of revenue. Sophisticated buyers focus on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents the true cash flow of your business. It is calculated by taking your net income and adding back owner-specific perks and non-recurring expenses. A higher, more stable Adjusted EBITDA typically results in a higher valuation. The final value is then determined by applying a multiple to that number.
| Valuation Factor | How It Influences Your Multiple |
|---|---|
| Practice Scale | Larger practices with higher EBITDA are seen as less risky and get higher multiples. |
| Provider Model | Practices not solely reliant on the owner-physician are more valuable. |
| Growth Profile | A documented history of growth and a clear path for future growth increases the multiple. |
Understanding your Adjusted EBITDA is the first step. Framing the story around your practice’s stability and growth potential is what secures a premium valuation.
Post-Sale Considerations
The work is not over once the sale documents are signed. Planning for the transition period is just as important as negotiating the price. A thoughtful post-sale strategy ensures a smooth handover, protects your legacy, and secures your financial future.
Your Transition Role
Most buyers will want you to stay on for a transition period, often for one to two years, to help integrate patients and staff. Defining your exact role, responsibilities, and compensation for this period is a key part of the negotiation. It ensures expectations are clear for both you and the new owner.
Securing Your Legacy and Staff
A major concern for many owners is a loss of control or a change in the culture they built. This is where deal structure becomes important. We find that partnership models, where you roll over a portion of your equity into the new, larger company, can be an excellent solution. This approach allows you to benefit from future growth while ensuring your legacy and team are protected.
Long-Term Financials
Finally, you need to manage the details. This includes working with a financial advisor on how to best handle your proceeds. It also involves technical steps like purchasing a “tail” malpractice insurance policy to cover you for any claims that may arise from your time owning the practice. Addressing these items upfront provides peace of mind.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What is the current market like for selling Ortho & MSK practices in Nebraska?
The Nebraska market for Ortho & MSK practices is active with a strong demand driven by local consolidation and outside investor interest. This creates a favorable environment for sellers, but buyers are discerning and look for well-run practices with stable referral bases and clear growth paths.
What are the key factors buyers look for when evaluating an Ortho & MSK practice in Nebraska?
Buyers focus on the practice’s structure and stability, including a diverse and stable referral network, a healthy payer mix, and the stability of the management team. Documentation of referral patterns, an organizational chart, and staff tenure highlight the practice’s operational continuity and culture.
How is an Ortho & MSK practice in Nebraska typically valued?
Valuation is based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which reflects the true cash flow by adjusting net income for owner-specific perks and non-recurring expenses. The final value is determined by applying a multiple based on practice scale, provider model, and growth profile.
What are the main steps involved in selling an Ortho & MSK practice in Nebraska?
The sale process usually takes 6-12 months and involves four main stages: 1) Preparation and valuation, 2) Confidential marketing to qualified buyers, 3) Negotiation and due diligence, and 4) Closing and transition with a plan for the post-sale role of the owner.
What should an owner consider regarding their role after selling their Ortho & MSK practice?
Most buyers want the owner to stay on during a transition period of one to two years to help integrate patients and staff. Defining the owner’s responsibilities, role, and compensation during this period is essential. Partnership models allowing equity rollover can help protect the owner’s legacy and benefit from future growth.