For owners of Orthopedic & Post-Surgical Rehab practices in Cincinnati, the decision to sell is a major milestone. This guide offers a clear view of the current market, from understanding your practice’s true value to navigating the sale process. We will walk through the key dynamics in the Cincinnati area, helping you understand the path to a successful transition and rewarding exit. The first step is often understanding what buyers are looking for today.
Cincinnati Market Overview
The market for medical practice sales is strong, and Orthopedic & Post-Surgical Rehab practices are in high demand. Buyers, including private equity groups and strategic health systems, see the value in this specialty’s consistent patient flow and potential for ancillary services. Cincinnati’s established healthcare network and stable economy make it an attractive location for these investors looking to expand their footprint. For practice owners, this translates into a significant opportunity. An active market means more potential buyers. More buyers can lead to better valuations and more favorable deal terms, but only if you run a structured process that creates competitive tension. It is not about finding a buyer. It is about finding the right one.
Key Considerations for Your Practice
Beyond the market, a successful sale depends on your specific circumstances. We find that owners who prepare by thinking through these areas achieve much better outcomes.
Your Personal Goals
Why are you selling? Are you seeking retirement, financial security, or relief from administrative burdens? Your reason for selling will shape the entire process, from the type of buyer you look for to the terms you are willing to accept. A partner who wants you to stay on for five years is very different from an acquirer planning a full transition.
Practice Dependence
Is the practice’s success tied entirely to you, or do you have associate providers who drive revenue? Buyers pay a premium for businesses that are not dependent on a single person. A practice with a strong team and diversified revenue streams is seen as less risky and, therefore, more valuable.
Financial Structure
The structure of your practice sale has major implications for your after-tax proceeds. An asset sale and an entity sale are taxed very differently. Planning this with an expert ahead of time can significantly impact the amount of money you ultimately take home.
Current Market Activity
The healthcare M&A landscape is incredibly active right now. With hundreds of physician practice sales happening annually across the country, momentum is strong. A significant portion of this activity is driven by private equity firms and other large investors who are specifically targeting profitable, well-run practices like those in orthopedics and rehab. These buyers are not looking for “fixer-uppers.” They are looking for platforms for growth. This means if your Cincinnati practice has a solid operational foundation and a good reputation, it is likely on their radar. This level of interest is a great opportunity for sellers, but it also means you will be dealing with experienced negotiators who know exactly what they want.
How Your Practice is Valued
Understanding your practice’s value is the first step toward a successful sale. Sophisticated buyers do not look at your net income. They look at your practice’s true cash flow, a metric called Adjusted EBITDA. We calculate this by taking your reported earnings and adding back personal expenses run through the business or an owner’s salary that is above market rate. This adjusted number gives a true picture of profitability.
That Adjusted EBITDA is then multiplied by a number, or a “multiple,” to determine the practice’s enterprise value. This multiple is not random. It changes based on risk and opportunity.
| Practice Size (Adjusted EBITDA) | Typical Valuation Multiple |
|---|---|
| Under $500K | 3.0x 6.0x |
| Over $1M | 5.5x 7.5x |
| Over $3M (Platform Target) | 8.0x 10.0x+ |
As you can see, scale matters. But so do other factors like your payer mix, your team’s strength, and your growth prospects. Getting this number right is the foundation of your entire exit strategy.
The Path to a Sale
Selling a practice is a structured journey, not a single event. It begins long before you speak to a buyer. The first phase is preparation, where we work with you to analyze financials and build a compelling story around your practice. Next, we confidentially market your practice to a curated list of qualified buyers, creating a competitive environment to drive up value. Once offers are in, we help you negotiate the best terms. Finally, we manage the due diligence phase, where the buyer verifies all the information about your business. This stage is critical. It is where many deals encounter unexpected challenges. Having an experienced advisor manage this process protects you from surprises and keeps the transaction on track to a successful closing.
After the Handshake: Life Post-Sale
The day you close the deal is not the end of the story. A successful transition requires planning for what comes next. How you structure the deal today determines your role, your financial outcome, and your legacy tomorrow.
Here are three key areas to consider.
- Your Continuing Role. Most buyers will want you to stay on for a transition period, typically one to three years. Your role, compensation, and clinical responsibilities during this time are all critical points to negotiate upfront. This ensures a smooth handover and protects the practice’s continuity.
- The Second Bite of the Apple. Many modern deals include an “equity rollover,” where you retain a minority stake in the new, larger company. This aligns your interests with the buyer and gives you the potential for a second, often larger, payout when the new entity is sold again in the future.
- Protecting Your Legacy. You have spent years building your practice and your team. The right partner will be one who respects your culture and is committed to taking care of your staff. We help you vet buyers not just on their financial offer, but on their cultural fit and their plans for the future of the practice you built.
Frequently Asked Questions
What is the current market like for selling Orthopedic & Post-Surgical Rehab practices in Cincinnati, OH?
The market for selling Orthopedic & Post-Surgical Rehab practices in Cincinnati is strong with high demand from buyers such as private equity groups and strategic health systems. Cincinnati’s stable economy and established healthcare network make it very attractive for investors.
How is the value of my Orthopedic & Post-Surgical Rehab practice determined?
Your practice’s value is based on Adjusted EBITDA, which reflects true cash flow by adding back personal or above-market salary expenses. This figure is then multiplied by a valuation multiple that varies based on practice size and other factors like payer mix and growth prospects.
What factors should I consider before selling my practice?
Important considerations include your personal goals (retirement, financial security, etc.), the practice’s dependence on you versus associate providers, and understanding the financial and tax implications of the sale structure (asset sale vs. entity sale).
What buyers are currently interested in these types of practices?
Buyers primarily include private equity firms and large health systems looking for profitable, well-run Orthopedic & Post-Surgical Rehab practices that serve as growth platforms. They generally prefer practices with solid operational foundations and good reputations.
What happens after I sell my practice?
Post-sale considerations include negotiating your continuing role and compensation during a transition period, potentially retaining a minority equity stake in the new entity for future payouts, and ensuring the new owner will protect your practice’s culture and staff legacy.
