Guide to Selling a Pain Management Practice in Denver, CO

Selling your Denver pain management practice in today’s dynamic market presents a significant opportunity. But turning that opportunity into a successful outcome requires a clear strategy. Strong buyer interest from private equity and health systems is driving demand. This guide provides an overview of the current landscape, from market trends to the fundamentals of valuation, to help you understand the path to maximizing your practice’s value and securing your legacy.

A Strong and Active Market

The national demand for pain management is growing steadily, and Denver is at the forefront of this trend. The city’s unique combination of economic health and demographic factors makes it a highly attractive market for practice acquisitions.

Denver’s Demand Drivers

Your practice benefits from a unique environment. Denver’s active, health-conscious population, combined with an aging demographic, creates a sustained need for sophisticated pain management services. This consistent demand underpins strong practice valuations and makes local practices appealing to a wide range of buyers.

The Buyer Landscape

Interest is not just local. Investor-backed platforms, private equity groups, and regional health systems are all actively seeking to partner with or acquire established pain management practices in the Denver metro area. This competition creates a favorable environment for sellers who are properly prepared to enter the market.

What Buyers Look for in a Denver Practice

Beyond the numbers, sophisticated buyers evaluate the underlying risks and growth opportunities within your practice. When preparing for a sale, you should focus on the same areas. A buyer will want to understand your provider mix. Is the practice reliant on a single owner-physician, or is there a team of associates driving revenue? Practices with a diversified provider base are often seen as less risky and command higher valuations. Your payer mix and the stability of your referral sources are also critical. Finally, well-integrated ancillary services, such as an in-house physical therapy or a toxicology lab, can significantly increase profitability and, therefore, your final sale price.

Understanding Current Valuations

The Denver market is seeing significant M&A activity, largely driven by consolidation. Private equity firms are building “platform” practices by acquiring strong, profitable groups and then adding smaller “tuck-in” acquisitions. This activity has kept valuation multiples strong, especially for practices that can demonstrate profitability and scale. While every practice is unique, valuations are typically based on a multiple of your Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The larger and more profitable your practice, the higher the multiple a buyer is willing to pay.

Typical Valuation Multiples by Practice Size

Navigating the Path to a Sale

A successful practice sale follows a structured, confidential process designed to protect your interests and maximize value. The journey typically unfolds in four main stages. It begins with Preparation, where we help you analyze your financials, understand your true Adjusted EBITDA, and create a compelling narrative about your practice’s strengths. Next comes confidential Marketing, where we approach a curated list of qualified buyers. This leads to Negotiation and Due Diligence, a critical phase where offers are compared and the buyer verifies your practice’s information. This is often where unprepared sellers run into trouble. The final stage is Closing, where legal documents are signed and the transition plan is initiated.

How Your Practice Is Valued

Valuing your practice is more than a simple formula. It is about determining its true, ongoing earning power. At SovDoc, we take an approach that mirrors how a private equity buyer will look at your business.

1. Establish Adjusted EBITDA. We start with your net income but don’t stop there. We “normalize” it by adding back one-time or owner-specific expenses, like a high owner salary, personal auto leases, or non-recurring legal fees. This Adjusted EBITDA figure represents the true cash flow of the practice.
2. Apply a Market Multiple. We then apply a valuation multiple (like those in the table above) to your Adjusted EBITDA. This multiple is not a guess. It is determined by factors like your location, provider team, growth rate, and recent comparable sales in the pain management sector.
3. Frame the Narrative. Buyers invest in the future. We help craft the story that your numbers tell one of stability, growth potential, and strategic value in the Denver market.

Life After the Sale: Structuring Your Transition

A successful sale is about more than the price you get at closing. It’s about structuring a deal that aligns with your personal and financial goals for the future. You need to consider your role after the transaction. Will you continue to practice full-time for a few years, or are you ready to reduce your hours? These terms are defined in your employment agreement. Furthermore, the deal structure has massive implications. Designing a tax-efficient sale can save you a significant amount in taxes. For sellers interested in future upside, negotiating for rollover equity (retaining 10-30% ownership in the new, larger company) provides a chance for a “second bite of the apple” when the new entity is sold again years later.