The market for outpatient physical therapy practices in New Orleans is active. Growth projections for Louisiana are strong, and private equity groups and larger strategic partners are looking for practices just like yours. This presents a significant opportunity for practice owners. But turning that opportunity into a successful exit requires a clear understanding of your practice’s value, the right timing, and a plan. This guide will walk you through the key areas to consider.
Market Overview
The timing for selling a physical therapy practice is influenced by market health. Right now, the outlook is positive. The data shows clear momentum, creating a favorable environment for owners who are prepared to sell.
A Growing National Landscape
Nationally, the physical therapy market is expanding steadily. One report projects the U.S. market will grow from $65.36 billion in 2025 to over $128 billion by 2032. This reflects an aging population and a greater focus on non-invasive treatment solutions. This national interest drives investment from buyers looking to enter or expand in key regions.
Local Momentum in New Orleans
This growth is mirrored locally. The physical therapy industry in Louisiana is on track to become an $884 million market. We see this on the ground in New Orleans, with the recent opening of new clinics by groups like Rehab Access and Children’s Hospital. This activity signals that both local and national players see real value and opportunity in the New Orleans area.
Key Considerations
A buyer looks deeper than your revenue. They are buying the future cash flow of your business, so they focus on stability and risk. Where do your patients come from? A diverse mix of strong referral relationships is a major asset. How stable is your team? With payroll making up nearly half of every sales dollar, a tenured and qualified staff that will stay through a transition is very attractive. Buyers also review your technology. Modern EMR and billing systems demonstrate operational efficiency. Preparing these areas of your practice before a sale can directly impact the offers you receive.
Market Activity
Its one thing to talk about market growth. Its another to see it in action. In and around New Orleans, large, well-funded buyers are actively making deals. This shows a competitive environment, which is good news for sellers.
Here are three recent examples of market activity:
- National Players Are Buying Big. U.S. Physical Therapy, a major national company, has been actively acquiring practices across the country, including large multi-clinic groups. Their presence sets a high bar for practice quality and valuation.
- Private Equity is Investing Here. When private equity firm GPB Capital acquired Rehab Access, a local operator, it sent a clear signal. Sophisticated financial buyers see New Orleans as a strategic market for investment and future growth.
- Partnerships are Fueling Expansion. The partnership between Doctors of Physical Therapy and Empower Physical Therapy brought a new competitor into Louisiana. These strategic partnerships are designed for rapid expansion, and acquiring established local practices is a key part of that playbook.
The Sale Process
Selling your practice is a structured process, not a single event. It begins long before you speak to a buyer. The first step is preparation, where you organize your financials and operations to present the practice in the best possible light. Next comes valuation, to set a realistic and defensible price. Only then do you confidentially approach a curated list of potential buyers. This creates a competitive environment. After you agree on a price and terms, the most critical phase begins: due diligence. This is where the buyer verifies everything about your business. Many deals encounter problems here if the initial preparation was not thorough. A well-managed process anticipates these challenges and keeps the deal on track to a successful closing.
Understanding Your Practice’s Value
How is a physical therapy practice valued? Buyers dont use a simple revenue percentage. They start with a metric called Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. More importantly, it adjusts for owner-specific expenses to show the true profitability of the practice. Things like an above-market owner’s salary or personal expenses run through the business are added back to calculate the real cash flow a new owner would see. This Adjusted EBITDA is then multiplied by a number (a “multiple”) to determine the practice’s total value. That multiple changes based on risk and opportunity, including your size, staff dependency, and growth potential.
Here is a simplified example:
| Financial Metric | Amount | Description |
|---|---|---|
| Reported Net Profit | $200,000 | The “on paper” profit. |
| Owner Salary Add-Back | +$75,000 | Adjusting owner pay to market rate. |
| Adjusted EBITDA | $275,000 | The true cash flow baseline. |
| Valuation Multiple | x 4.5 | Based on market, risk, and growth. |
| Estimated Practice Value | $1,237,500 | The starting point for negotiations. |
Planning for Life After the Sale
The transaction is not the finish line. It’s the beginning of your next chapter. What do you want that to look like? Many owners mistakenly believe a sale is an all-or-nothing event. This is not true. If you want to continue practicing without the headaches of management, a deal can be structured to ensure your clinical role. If you want a second financial reward, you can “roll over” some of your equity and partner with the new owner for future growth. A successful transition plan considers your personal goals, protects your staff, and secures the legacy you spent years building. Planning for this from the start ensures the final deal aligns with the future you want.
Frequently Asked Questions
What is the current market outlook for selling an outpatient physical therapy practice in New Orleans?
The market for outpatient physical therapy practices in New Orleans is active and positive. There is strong growth projected for Louisiana, with local and national players actively investing and acquiring practices, indicating a favorable environment for sellers.
How is the value of an outpatient physical therapy practice determined?
Practice value is primarily determined using Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which adjusts for owner-specific expenses to show true profitability. This adjusted EBITDA is then multiplied by a valuation multiple that reflects the risk, opportunity, size, and growth potential of the practice.
What are key factors buyers consider when evaluating a physical therapy practice for purchase?
Buyers look beyond revenue; they assess future cash flow stability and risk, patient referral diversity, staff stability and qualifications, and modern operational technologies like EMR and billing systems. These factors strongly affect the attractiveness and offers received by sellers.
What steps should I take when preparing to sell my outpatient physical therapy practice?
Preparation involves organizing financials and operations to showcase the practice’s strengths, conducting a valuation to set a realistic price, and confidentially approaching potential buyers to create competition. Thorough preparation reduces due diligence issues and helps keep the sale on track for a successful closing.
Can I structure a sale to continue working in my practice or benefit financially after the sale?
Yes, selling a practice does not have to be an all-or-nothing event. Deals can be structured to allow you to continue your clinical role without management responsibilities, or to “roll over” some equity and partner with the new owner for future growth, aligning the sale with your personal and professional goals.