Thinking about the next chapter for your practice? This guide walks through the current market, valuation insights, and key steps for a successful sale in Chicago’s thriving orthopedic sector.
Selling your Orthopedic and Post-Surgical Rehab practice in Chicago presents a significant opportunity. The market is defined by strong, consistent growth and an unprecedented level of buyer interest, from hospital systems to private equity firms. For practice owners, this climate can lead to premium valuations, but successfully navigating this landscape requires careful preparation and strategic planning. Understanding the key market drivers, your practice’s true value, and the sale process is the first step toward a rewarding exit.
Curious about what your practice might be worth in today’s market?
A Seller’s Market in the Windy City
The current climate for orthopedic and post-surgical rehab in Chicago is exceptionally strong. National trends show the rehabilitation services market is projected to grow significantly year over year. This growth is amplified in the orthopedic space, where high demand for surgical services creates a consistent and valuable stream of post-surgical rehab patients.
High Demand Meets Investor Interest
Orthopedic practices are one of the most profitable specialties. This has not gone unnoticed. In Chicago, we see two major forces creating opportunity for practice owners:
- Strategic Buyers: Hospital systems and larger orthopedic platforms are looking to expand their footprint and continuum of care.
- Financial Buyers: Private equity firms are actively investing, attracted by the specialty’s strong profit margins and potential for growth.
This combination of buyers creates a competitive environment, which is great news for sellers who are properly prepared.
More Than Just Numbers
Beyond the positive market trends, a successful sale depends on your personal and operational readiness. The transaction is financial. The decision is personal. Before you go to market, think about your goals. Are you looking for a full exit, or would you consider staying on for a few years? Your answer changes the type of buyer you look for. It is also best to consider selling when your practice is performing well, not when you are forced to by burnout or financial stress. Assembling key documents, like financial statements and payor contracts, and having a clear plan for your staff and patients will make the process smoother and more valuable.
What’s Happening on the Ground
The theory is promising, and the reality is active. The M&A market for healthcare practices in Chicago is busy. Here are a few key trends we see driving deals for orthopedic rehab owners.
- The Rise of Platforms. Large, private equity-backed groups are actively acquiring practices to build regional and national platforms. They pay premium prices for well-run practices that can serve as a foundation for growth.
- Strategic Consolidation. Hospitals and large physician groups are acquiring rehab practices to control the patient journey from surgery to recovery. If your practice has strong referral relationships with local surgeons, you are a prime target.
- A Focus on Profitability. Buyers are sophisticated. They look past simple revenue numbers to your practice’s Adjusted EBITDA. Practices that can demonstrate clean financials and consistent profitability attract the most competitive offers and highest valuation multiples.
Understanding the Path to a Sale
Selling your practice isn’t an overnight event. A typical sale process takes between six and twelve months from start to finish. It starts with a comprehensive valuation to understand what your practice is truly worth. From there, we confidentially market the opportunity to a curated pool of qualified buyers. This creates a competitive environment to drive the best price and terms. Once offers are received, we move into negotiations, followed by a formal letter of intent. The final stage is due diligence, where the buyer verifies all financial, operational, and legal aspects of your practice. This is often the most demanding part of the process and where having an experienced guide is most critical.
What Is Your Practice Really Worth?
A common question we hear is, “What is my practice worth?” The answer is more complex than a simple multiple of your revenue. Sophisticated buyers value your practice based on its Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow after “normalizing” for owner-specific expenses or one-time costs.
At SovDoc, we don’t use simple rules of thumb. We determine your valuation by first calculating a defensible Adjusted EBITDA, then applying a market-based multiple. This multiple is influenced by several factors.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Model | Owner is the only provider | Associate-driven, multi-provider |
| Referral Sources | Rely on 1-2 surgeons | Diverse, stable referral base |
| Growth | Flat or declining revenue | Consistent, provable growth |
| Systems | Basic, manual operations | Documented systems, modern EMR |
Getting this right is the foundation of a successful sale. A proper valuation tells you not just what your practice is worth today, but what it could be worth with strategic preparation.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
The day the deal closes is a beginning, not an end. Thinking about your post-sale life is a critical part of the planning process. The structure of your deal will determine your financial outcome and your professional role for years to come.
Your Future Role
Do you want to retire immediately, or are you open to working for a few more years? Many deals, especially with private equity, involve the owner staying on to ensure a smooth transition. Some owners even choose to “roll over” a portion of their sale proceeds into equity in the new, larger company. This provides a chance for a “second bite of the apple” when that larger company is sold again down the road.
Structuring Your Proceeds
The sale price is one thing. Your after-tax, take-home amount is another. A deal can be structured in different ways, with major implications for your tax burden. We help our clients model these scenarios, including any potential earnouts, where a portion of the payment is tied to the practice’s future performance. Planning for this from the start ensures your exit is as financially rewarding as possible.
The right exit approach depends on your personal and financial objectives.
Frequently Asked Questions
What is the current market environment for selling an Orthopedic & Post-Surgical Rehab practice in Chicago?
The market for selling orthopedic and post-surgical rehab practices in Chicago is very strong right now. There is a high level of buyer interest, including strategic buyers like hospital systems and financial buyers such as private equity firms. This creates a competitive environment conducive to premium valuations for sellers who are well prepared.
What factors influence the valuation of an orthopedic rehab practice in Chicago?
Valuations are primarily based on the practice’s Adjusted EBITDA rather than simple revenue multiples. Key factors that impact the multiple applied include the provider model (single owner vs. multi-provider), diversity and stability of referral sources, consistent revenue growth, and whether the practice has documented systems and modern EMR. Practices that score well on these factors attract higher multiples and better sale prices.
How long does the typical sale process take for an orthopedic rehab practice?
The sale process usually takes between six and twelve months from start to finish. It begins with a comprehensive valuation, followed by confidential marketing to qualified buyers, negotiations, a formal letter of intent, and finally a due diligence phase to verify financial, operational, and legal details.
What should practice owners consider regarding their role after the sale?
Owners should consider whether they want a full exit or if they are open to staying on for a transition period. Many deals, especially with private equity buyers, involve the owner working for several years after the sale to ensure smooth continuity. Some owners also choose to reinvest part of their proceeds into equity in the acquiring company for potential future returns.
What are important steps to prepare for a successful sale?
Preparation involves both personal and operational readiness. This includes clearly defining your goals (full exit vs. transition), assembling key documents like financial statements and payor contracts, maintaining good relationships with referring surgeons, and ensuring clean, profitable financial records. Selling at a time of strong practice performance rather than during burnout or financial stress will also improve outcomes.