Selling your Orthopedic and Post-Surgical Rehab practice in Austin is a significant decision, and you are right to be asking questions. The market is active and full of opportunity, driven by strong growth in the rehabilitation sector. This guide provides a clear roadmap for Austin practice owners, covering key trends, valuation principles, and the steps involved. Proper preparation is the key to a successful outcome.
Market Overview
The timing for selling an orthopedic and rehab practice has rarely been better. Nationally, the U.S. physical therapy market is valued at over $47 billion in 2024, with the global rehabilitation market projected to approach $500 billion within the next decade. This growth is creating a new level of interest from buyers.
Here in Austin, TX, that national trend is amplified. The city’s growth, active population, and expanding healthcare infrastructure make it a prime target for acquisition. Buyers, from large health systems to private equity groups, are actively looking for established, well-run practices to gain a foothold or expand their presence in this competitive market. This puts you, the practice owner, in a strong position if you approach the process strategically.
Key Considerations for Austin Sellers
A strong market is a great start. But maximizing your practice’s value in Austin requires understanding a few specific factors. Your preparation should focus on these three areas.
- Your Practice’s Complete Story. Buyers today, especially private equity, are not just buying your patient list. They are interested in the efficiency of your operations and your potential for growth. The increased provision of ancillary services like imaging or specialized rehab programs within orthopedic clinics is a major value driver. We help owners frame this story to show buyers the full potential.
- The Modern Buyer Landscape. The “buyer” is no longer just another local doctor. In Austin, you are just as likely to engage with a regional healthcare system or a national private equity firm. Each buyer type has different goals, valuation methods, and deal structures. Knowing who to approach, and how, is critical.
- Protecting Your Legacy and Staff. A sale is about more than money. It’s about ensuring your team is taken care of and the patient care philosophy you built continues. The right deal structure can secure these outcomes. This is often a key point of negotiation that requires careful planning.
Market Activity and Private Equity
The biggest trend shaping practice sales in Austin is the rise of private equity investment. PE firms see the value in the orthopedic and rehab space. They are looking to partner with successful practices to build larger, more efficient regional and national groups.
This is not about selling out. It is about seizing an opportunity. For many practice owners, a PE partnership can provide the capital to expand, upgrade technology, and reduce administrative burdens, all while allowing you to focus on clinical work. These buyers often pay premium valuations for well-prepared practices. They are looking for proven operations, not just potential. That is why we tell our clients that the best time to start preparing for a sale is two to three years before you plan to exit. This preparation ensures you are selling from a position of strength.
The Practice Sale Process
Selling a practice is not a single event. It is a multi-stage process where preparation is everything. Missteps in any stage can cost you time and money. Here is a simplified look at the journey.
| Stage | What It Involves | Where Owners Face Challenges |
|---|---|---|
| 1. Preparation & Valuation | Gathering financial data, understanding your true profitability (Adjusted EBITDA), and getting a professional valuation. | Messy financial records and an inaccurate sense of what the practice is actually worth. |
| 2. Buyer Outreach | Confidentially identifying and approaching a curated list of qualified buyers (strategic, financial, and individual). | Wasting time with unqualified buyers or failing to create competitive tension for the best offer. |
| 3. Negotiation & Diligence | Structuring the deal, signing a Letter of Intent (LOI), and undergoing the buyer’s deep dive into your operations. | Unexpected issues discovered in due diligence that derail the deal or lower the price. |
Each step has unique considerations. Getting the first step, valuation, correct is the foundation for everything that follows.
How Your Practice is Valued
Many owners believe their practice’s value is based on a percentage of gross revenue. Sophisticated buyers, however, look at your profitability. The single most important metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
This is not the same as the net income on your tax return. We calculate it by taking your reported profit and adding back owner-specific expenses. These can include your above-market salary, a car lease run through the business, or other personal items. Normalizing these reveals your practice’s true cash flow.
That Adjusted EBITDA figure is then multiplied by a “multiple” to determine the enterprise value. This multiple is not fixed. It changes based on your location, provider mix, growth trajectory, and dependence on a single owner. This is why a professional valuation is so important. It uncovers the hidden value in your practice and frames it in a way buyers understand and will pay for.
Planning for Life After the Sale
The transaction is not the end of the story. A successful exit strategy includes a clear plan for what comes next. What you do here has major implications for your future, your team, and your financial security.
Structuring Your Role and Legacy
For many owners, walking away on day one is not the goal. Partnership models allow you to sell a majority of your practice while retaining a significant ownership stake (an “equity rollover”). This gives you a second financial opportunity when the larger group sells again in the future. You can also structure an ongoing clinical or leadership role, ensuring a smooth transition for patients and staff.
Optimizing Your Financial Outcome
How a deal is structured dramatically affects your after-tax proceeds. An asset sale versus an entity sale can have completely different tax results. You also may negotiate an “earnout,” which provides additional payments if the practice hits certain performance targets after the sale. Planning for these details in advance with an advisor is critical to maximizing what you actually take home.
Frequently Asked Questions
What is the current market outlook for selling an Orthopedic & Post-Surgical Rehab practice in Austin, TX?
The market is very favorable right now, driven by strong growth in the rehabilitation sector both nationally and locally in Austin. The city’s expanding healthcare infrastructure and active population increase buyer interest, including from large health systems and private equity groups.
How is the value of my Orthopedic & Post-Surgical Rehab practice determined?
Practice value is primarily determined by its Adjusted EBITDA, which reflects true profitability by normalizing profits and adding back owner-specific expenses. This figure is then multiplied by a market-based multiple, which varies depending on location, provider mix, growth potential, and owner dependence.
Who are the typical buyers for practices in Austin, and how does this affect the sale?
Buyers range from other local doctors to regional healthcare systems and national private equity firms. Each buyer type has different goals, valuation methods, and deal structures, so understanding this landscape is key for a strategic and successful sale.
What steps should I take to prepare for selling my practice?
Preparation includes gathering accurate financial data, understanding your practice’s profitability, getting a professional valuation, and framing your practice‚Äôs story to highlight efficiency and growth potential. Starting this process 2-3 years before a planned exit is recommended.
How can I protect my legacy and ensure my staff is taken care of during the sale?
You can structure deals that preserve your practice’s patient care philosophy and provide security for your staff. Partnership models allow retention of an ownership stake and ongoing roles, enabling a smooth transition and protecting your legacy.