The market for Outpatient Physical Therapy practices in Oregon is strong, driven by statewide growth and a national boom in the industry. For practice owners, this presents a significant opportunity. However, turning that opportunity into a successful sale requires careful planning and a deep understanding of today’s buyers. Maximizing your practice’s value means knowing the market, preparing your financials, and navigating the sale process correctly. This guide provides the initial insights you need to start thinking about your transition.
Market Overview
If you are considering selling your Oregon physical therapy practice, the timing is favorable. The market is not just stable. It is actively growing, supported by powerful demographic and economic trends.
National Tailwinds
Across the country, the physical therapy sector is expanding rapidly, with projections estimating an 8.2% compound annual growth rate through 2031. A primary driver is the aging population, which increases the demand for restorative and preventative care. This national demand makes the entire industry, including well-run local practices, attractive to buyers.
Oregon’s Growth Story
This national trend is clearly reflected in Oregon. The state’s physical therapy industry is on a path to become a nearly $700 million market. For practice owners, this means your business operates within a thriving ecosystem. Buyers, from private equity groups to local health systems, see this growth and are actively looking for acquisition opportunities in the region.
Key Considerations for Oregon PT Owners
A strong market provides the opportunity, but the details of your practice determine the outcome. Buyers look past the general trends and scrutinize specific aspects of your business. Here are three areas we see successful sellers focus on before going to market.
- Get Your Financials in Order. Buyers need to see clean, clear financials. This goes beyond a simple profit and loss statement. You should be able to present your annual revenue, net profit margin (nationally, this averages 14-20%), and most importantly, your Adjusted EBITDA. This adjusted figure gives the truest picture of your practice’s profitability.
- Tell Your Practice’s Story. What makes your practice unique? A long history in the community, strong referral relationships, and a loyal patient base are valuable assets. Quantifying these aspects, such as patient retention rates or the number of referring physicians, turns a good reputation into a line item that increases value.
- Demonstrate Operational Strength. Is your practice overly dependent on you, the owner? Practices with diversified provider teams and efficient administrative systems are less risky for a buyer and often command higher prices. Showcasing this operational maturity is a key part of the process.
Market Activity and Buyer Interest
The growth in Oregons physical therapy market is attracting a diverse group of buyers. We see consistent transaction activity, from smaller, local practices to larger, multi-site groups. Understanding who these buyers are and how they value practices is important for any potential seller.
Who Is Buying?
The buyers are not just other physical therapists looking to expand. A major trend is the rise of private equity (PE) investment in healthcare. These groups see physical therapy as a stable, growing industry and are actively acquiring practices to build larger platforms. This creates a competitive environment for well-run practices, which can increase final sale prices.
What Are They Paying?
Valuation is never a single number, but we can look at common benchmarks from recent deals. Physical therapy practices often sell for a multiple of their earnings or revenue.
* EBITDA Multiples: A common range is 3.0x to 6.0x of Adjusted EBITDA.
* Revenue Multiples: Practices have also sold for 0.52x to 0.77x of annual revenue.
Where your practice falls in these ranges depends on the factors we discussed earlier, like size, profitability, and operational strength.
Navigating the Sale Process
Selling a practice is a structured project, not a single event. While every deal is unique, the journey typically follows a clear path. Preparing for each stage is the best way to ensure a smooth process and a successful outcome.
- Preparation and Strategy. This is where you start, ideally one to two years before you plan to sell. It involves cleaning up financials, creating a compelling growth story, and defining your personal goals for the sale.
- Valuation. A comprehensive valuation is performed to establish a credible asking price. This becomes the foundation for all negotiations.
- Confidential Marketing. Your advisor will confidentially approach a curated list of qualified buyers. This is not about listing your practice publicly. It is about creating a competitive process behind the scenes.
- Negotiation and Offer. You will receive offers, typically in the form of a Letter of Intent (LOI). We help you compare offers not just on price, but on structure and terms.
- Due Diligence. This is the buyers formal investigation into your practice. It is often the most intense phase and where many deals encounter problems if preparation was inadequate.
- Closing. Once due diligence is complete and legal documents are finalized, the transaction is closed, and the funds are transferred.
Understanding Your Practice’s True Value
One of the biggest questions practice owners have is, “What is my practice really worth?” The answer is more complex than a simple revenue multiple. Sophisticated buyers base their valuation on your practice’s Adjusted EBITDA. This starts with your net income and adds back owner-specific costs (like an above-market salary) and one-time expenses to show the true, ongoing profitability.
That Adjusted EBITDA figure is then multiplied by a number (the “multiple”) to determine the total enterprise value. The multiple isn’t random. It is based on the quality and risk of your earnings.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Owner Reliance | Highly reliant on owner | Associate-driven model |
| Size (EBITDA) | Under $500K | Over $1M |
| Growth | Flat patient volume | Consistent annual growth |
| Systems | Basic, manual operations | Modern, efficient systems |
Getting a professional valuation is the only way to know where you stand. It ensures you don’t leave money on the table by undervaluing your life’s work.
Life After the Sale
The closing of the sale is not the end of the story. A successful transition is one where you have a clear plan for what comes next, both for you and for the practice you built. Thinking about these things early in the process is important.
- Protecting Your Legacy and Staff. What happens to your practice’s name and your team? These points can and should be part of the negotiation. The right buyer will want to ensure a smooth transition for staff and patients, and the terms of this can be defined in the sale agreement.
- Defining Your Future Role. A sale doesn’t always mean walking away on day one. Many owners stay on for a transition period. Some deals, particularly with private equity, involve the owner “rolling over” a portion of their equity. This means you sell the majority of the practice but retain a minority stake, allowing you to benefit from the practice’s future growth.
- Understanding Your Financial Future. Your sale proceeds are subject to taxes and fees. The structure of the sale can have a big impact on your net, after-tax outcome. Furthermore, if your deal includes an “earnout” (additional payments tied to future performance), you need to understand how those targets are measured. Planning for this from the start ensures your financial goals are met.
Frequently Asked Questions
What is the current market outlook for selling an Outpatient Physical Therapy practice in Oregon?
The market for Outpatient Physical Therapy practices in Oregon is strong and growing, driven by both statewide and national trends. Oregon’s physical therapy sector is expected to become a nearly $700 million market, with buyers actively looking for acquisition opportunities. Nationally, the sector is projected to grow at an 8.2% annual rate through 2031, fueled by an aging population increasing demand for care.
What financial metrics should I prepare before selling my Oregon PT practice?
Buyers focus on clear and clean financials including annual revenue, net profit margin (typically around 14-20% nationally), and most importantly, the Adjusted EBITDA. Adjusted EBITDA reflects the true profitability of your practice by adjusting for owner-specific and one-time expenses, providing a more accurate measure of ongoing earnings.
Who are the typical buyers for Oregon outpatient physical therapy practices?
Buyers range from local health systems and other physical therapists to increasingly, private equity (PE) firms. PE groups are attracted to physical therapy as a stable and growing industry and are actively acquiring practices to build larger platforms, creating a competitive market that can drive up sale prices.
What valuation multiples can I expect when selling my physical therapy practice in Oregon?
Typical valuation benchmarks include multiples of Adjusted EBITDA ranging from 3.0x to 6.0x, and revenue multiples from 0.52x to 0.77x of annual revenue. Where your practice falls depends on factors like size, profitability, operational strength, and dependence on the owner.
What steps are involved in the process of selling a physical therapy practice in Oregon?
The sale process typically follows these stages: 1) Preparation and strategy, ideally starting 1-2 years before sale; 2) Comprehensive valuation to set an asking price; 3) Confidential marketing to qualified buyers; 4) Receiving and negotiating offers; 5) Buyer due diligence; and 6) Closing the sale and transferring funds. Proper preparation at each stage is critical for success.