Selling your Orthopedic and Post-Surgical Rehab practice is one of the most significant financial decisions you will ever make. For owners in Milwaukee, the current market presents unique opportunities and challenges. Successfully navigating this process requires careful preparation, strategic timing, and a clear understanding of your practice’s true value. This guide provides a roadmap for practice owners considering their next chapter.
Every practice sale has unique considerations that require personalized guidance.
Market Overview: The Milwaukee Landscape
The market for orthopedic and rehab services in Milwaukee is robust. It’s home to major health systems and well-regarded specialty groups. This creates a crowded and competitive field.
A Competitive Landscape
When you decide to sell, you are not just competing for patients anymore. You are competing for the attention of qualified buyers. These buyers, whether they are expanding local groups or private equity firms, have many options. They will compare your practice against others on every level, from financial performance to operational efficiency.
The Opportunity for Distinction
This competition means that simply having a profitable practice is not enough. You must clearly articulate what makes your practice special. Is it your unique approach to post-surgical rehab? A loyal, referring network of surgeons? Or perhaps a strategic location serving a growing community? Standing out in the Milwaukee market is the first step toward achieving a premium valuation.
Key Considerations for a Successful Sale
Proper planning is the most reliable way to influence your practice’s final sale price. Before you even think about listing, focus your attention on these three foundational pillars.
- Financial Readiness. Buyers scrutinize financials more than anything else. This goes beyond having a recent Profit & Loss statement. It means having clean, organized books for the last several years. You need to understand your practice’s Adjusted EBITDA, which accounts for owner-specific expenses and one-time costs to show the true underlying profitability.
- Operational Stability. A potential buyer is purchasing a future income stream. That stream is threatened if your key staff and patients leave after the transition. Demonstrating high staff morale, clear operational procedures, and a plan for patient retention is not just good practice. It is a critical value driver.
- Strategic Alignment. The highest bid is not always the best one. You must define your ideal buyer. Are you looking for a partner who will preserve your legacy and take care of your staff? Or is a purely financial transaction your goal? Knowing this helps you target the right buyers and negotiate for terms that meet your personal and professional objectives.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Market Activity: Reading the Signs
An owner cannot time the market perfectly, but you can understand its direction. Right now, the orthopedic sector is seeing significant consolidation, and Wisconsin is part of that trend.
Consolidation Is Here
A recent transaction saw a consortium of Wisconsin-based orthopedic practices sell to Surgery Partners, a major national operator. This is not an isolated event. It is a clear signal that larger strategic buyers and private equity groups are actively looking to acquire well-run practices in our region. They are seeking to build scale, expand service lines, and increase their market share.
What This Means for You
This trend creates both opportunity and risk. For a prepared practice, it means there are motivated, well-capitalized buyers in the market. For an unprepared practice, it could mean being approached with a take-it-or-leave-it offer that doesn’t reflect your practice’s true value. Running a confidential, competitive sale process is the only way to ensure you generate multiple offers and maintain control.
The 4 Phases of the Sale Process
Selling a medical practice is not a single event. It is a structured process with distinct phases, each with its own challenges. Understanding these stages helps you prepare for what lies ahead.
- The Preparation Phase. This is the work you do before your practice is ever shown to a buyer. It involves gathering financial documents, optimizing operations, and building the team of advisors (legal, accounting, M&A) who will guide you. This stage can take 6-12 months.
- The Marketing Phase. This is not about putting a “for sale” sign in the window. It is a confidential process of identifying and approaching a curated list of qualified buyers who align with your goals. The objective is to create competitive tension to drive up value.
- The Diligence Phase. Once you accept an initial offer, the buyer begins their formal due diligence. They will scrutinize every aspect of your practice, from billing codes and compliance to employment contracts. This is the most intense phase and where many deals encounter unexpected problems.
- The Transition Phase. After the legal documents are signed, the work of transitioning the practice begins. This involves communicating with staff and patients, transferring custodianship of medical records, and ensuring the new owner is set up for success.
Preparing properly for buyer due diligence can prevent unexpected issues.
How Your Practice Is Valued
One of the biggest questions owners have 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, a measure of its true cash flow. From there, they apply a multiple. That multiple is not fixed. It is determined by factors that measure the quality and risk of that cash flow.
| Factor Affecting Value | Why It Matters to a Buyer |
|---|---|
| Provider Reliance | A practice that runs smoothly without being dependent on the owner is less risky and more valuable. |
| Growth Profile | Buyers pay a premium for a practice with a clear, believable plan for future growth. |
| Payer Mix | A healthy mix of stable, in-network insurance contracts is seen as more secure than a heavy reliance on cash-pay. |
| Ancillary Services | Additional revenue streams, like on-site rehab or diagnostics, increase profitability and multiples. |
Thinking like a buyer is key to understanding your practice27s potential value. They are not just buying your past performance. They are paying for your future potential.
Valuation multiples vary significantly based on specialty, location, and profitability.
After the Sale: Planning Your Next Chapter
The day you sign the closing documents is a beginning, not an end. A successful transition requires you to plan for what comes next, both for the practice you built and for your own financial future.
Protecting Your People and Legacy
Your commitment to your staff and patients is a key part of your practice27s goodwill. A smooth transition plan is critical. This involves communicating openly with your team, introducing the new ownership thoughtfully, and working to ensure continuity of care for your patients. A well-managed transition protects the legacy you spent years building.
Structuring Your Financial Future
The final sale price is not the same as the cash you will have in the bank. The deal structure has major implications. Will part of your payment be in an “earnout,” dependent on future performance? Will you “rollover” some of your equity and partner with the new owner? Each of these decisions affects your risk, your potential upside, and, critically, your after-tax proceeds. Planning for this early is essential.
The structure of your practice sale has major implications for your after-tax proceeds.
Frequently Asked Questions
What makes the Milwaukee market unique for selling an Orthopedic & Post-Surgical Rehab practice?
Milwaukee’s market is robust with major health systems and specialty groups, leading to a competitive landscape. Sellers not only compete for patients but for qualified buyers like local groups and private equity firms. Distinctiveness in approach, location, or referral networks is crucial for achieving a premium valuation.
What are the key preparation steps before listing an Orthopedic & Post-Surgical Rehab practice for sale?
Preparation involves ensuring financial readiness with well-organized books and a clear understanding of Adjusted EBITDA, demonstrating operational stability through high staff morale and patient retention plans, and strategic alignment by defining your ideal buyer to meet personal and professional objectives.
How is the value of an Orthopedic & Post-Surgical Rehab practice determined?
Value is based on Adjusted EBITDA, which shows true cash flow, multiplied by a factor dependent on provider reliance, growth potential, payer mix, and additional services. Buyers focus on future potential over past performance to decide the purchase price.
What are the main phases of selling an Orthopedic & Post-Surgical Rehab practice in Milwaukee?
The sale process includes Preparation (document gathering and team building), Marketing (confidentially reaching qualified buyers), Diligence (buyer’s thorough scrutiny), and Transition (handover to new owner with staff and patient communication).
What should sellers consider for after-sale planning of their Orthopedic & Post-Surgical Rehab practice?
Sellers should focus on protecting their staff and patient legacy with a smooth transition plan, and carefully structuring their financial future to manage deal elements like earnouts, equity rollover, and tax implications to maximize after-tax proceeds.