If you own a pain management practice in New Hampshire, you have built something valuable. The decision to sell is a significant one, personally and financially. This guide offers a clear overview of the current market, the key steps in the process, and the specific factors you need to consider in the Granite State. We want to help you understand your options so you can prepare for a successful transition when the time is right.
Curious about what your practice might be worth in today’s market?
Market Overview
The current market for selling a medical practice is active, especially for specialist fields like pain management. While general primary care practices might sell for a multiple of their yearly revenue, profitable specialty practices often command higher valuations. For a pain management practice, this could mean a sale price of 0.8 to over 1.0 times your annual revenue. For a practice generating $2 million a year, that is a significant difference.
The Valuation Landscape
Valuation is more than a simple formula. Buyers are looking closely at profitability. A mature, single-physician pain management practice can be very profitable, which makes it an attractive target. This reality is a key driver in the market today.
The Role of Private Equity
One of the biggest forces in the market is the activity of private equity (PE) firms. These groups are actively acquiring pain management practices, seeing them as strong investment platforms. This interest from well-capitalized buyers creates a competitive environment, which can lead to better outcomes for sellers who are properly prepared.
Key Considerations
Selling a practice in New Hampshire involves more than finding a buyer. The state has specific rules that you must navigate correctly to ensure a smooth and legal transaction. A failure to plan for these can cause major delays or even prevent a sale from closing.
Here are two of the most important factors for practice owners in New Hampshire:
- Deal Structure and State Law. New Hampshire has Corporate Practice of Medicine (CPOM) laws. In simple terms, this means a non-physician-owned corporation cannot employ physicians to practice medicine. This law directly impacts who can buy your practice and how the sale is structured. Often, the solution involves a sale to another physician or a physician-owned group, or creating a management services organization (MSO) model. Understanding these options early is critical.
- Regulatory Compliance. As a pain management specialist, you are already familiar with the strict state and federal laws around controlled substances. During a sale, a buyer’s legal team will closely examine your practice’s compliance history, including adherence to New Hampshire’s specific statutes. Any issues here can become a major obstacle during their review.
Proper preparation before selling can significantly increase your final practice value.
Market Activity
The interest in pain management is not theoretical. It is driven by strong and predictable financial performance, which is exactly what sophisticated buyers and investors look for. Private equity investment, in particular, has fueled dozens of transactions in the pain management sector in recent years.
Buyers are drawn to the strong revenue potential of these practices. They break down your practice’s financials to understand its core health. What they often find is a very attractive business model.
| Source of Revenue | Typical Annual Generation (Single Physician) |
|---|---|
| Facility Fees | $2.5 million to $3.0 million |
| Professional Fees | Around $1.0 million |
| Total Potential | $3.5 million to $4.0 million+ |
This level of performance makes your practice a valuable asset. The key is presenting this financial story clearly and professionally to attract the right kind of attention from serious buyers.
The Sale Process
Selling your practice follows a clear, multi-stage path. It begins long before you list the practice and continues well past the initial handshake. The entire process generally flows from Valuation to Preparation, then to confidential Marketing, and finally to Due Diligence and closing. Each step has its challenges, but due diligence is often where a promising deal can fall apart. This is the stage where the buyer and their advisors conduct a deep dive into your financial, legal, and operational records. Clean, organized, and transparent records are your best defense against unexpected problems. Being prepared for this intense review is one of the most important things you can do to ensure a successful outcome.
The due diligence process is where many practice sales encounter unexpected challenges.
Valuation
So, what is your practice actually worth? Owners often think in terms of a simple multiple of revenue, but professional buyers use a more detailed approach. The most important metric they use is called Adjusted EBITDA.
Think of Adjusted EBITDA as your practice’s true, underlying profitability. It starts with your net income and adds back interest, taxes, depreciation, and amortization. Then, it adjusts for any owner-specific or one-time expenses, like a car lease run through the business or an above-market owner salary. This gives a clear picture of the cash flow a new owner could expect. This Adjusted EBITDA figure is then multiplied by a number based on several factors.
Here are a few key drivers of your valuation multiple:
- Adjusted EBITDA. The single most important number. We find many practices undervalue themselves until their EBITDA is properly normalized.
- Provider Mix. Is the practice dependent on you, the owner, or does it have associate physicians who will stay after the sale? Less owner-dependency means less risk for a buyer and a higher multiple.
- Growth Potential. Is there a clear path to growth? This could be through adding ancillary services or opening a new location. A strong growth story is highly attractive to buyers.
Valuation multiples vary significantly based on specialty, location, and profitability.
Post-Sale Considerations
Finalizing the sale agreement is a milestone, but it is not the end of the journey. The decisions you make during negotiations will shape your financial future and your professional life for years to come. For example, the structure of your deal has massive implications for your after-tax proceeds. A poorly structured sale can leave a surprising amount of your hard-earned money on the table for the IRS. Beyond taxes, you need a clear plan for your own transition. Will you retire immediately, or stay on for a period of time? Many deals today involve structures like earnouts or equity rollovers, where you retain a stake in the new, larger company. This can provide a “second bite at the apple,” often leading to another significant payday when the new entity is sold again in the future. Planning for these outcomes is just as important as negotiating the initial price.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What is the typical valuation multiple for selling a pain management practice in New Hampshire?
Pain management practices in New Hampshire typically sell for a multiple of 0.8 to over 1.0 times their annual revenue, which is higher than general primary care practices due to their profitability.
How do New Hampshire’s Corporate Practice of Medicine (CPOM) laws affect the sale of a pain management practice?
New Hampshire’s CPOM laws prohibit non-physician-owned corporations from employing physicians to practice medicine, which affects who can buy your practice and how the sale is structured. Common solutions include selling to another physician, a physician-owned group, or using a management services organization (MSO) model.
Why is Adjusted EBITDA important in valuing a pain management practice?
Adjusted EBITDA provides a clear picture of the practice’s true underlying profitability by normalizing net income with adjustments for interest, taxes, depreciation, amortization, and one-time or owner-specific expenses. This metric helps buyers understand the cash flow they can expect and is the main driver of valuation multiples.
What role do private equity firms play in the market for pain management practices in New Hampshire?
Private equity firms are active buyers in the pain management practice market, viewing these practices as strong investment platforms. Their participation creates a competitive environment that can lead to better sale outcomes for well-prepared sellers.
What are key factors to prepare for during the due diligence stage when selling your pain management practice?
During due diligence, buyers thoroughly review financial, legal, and operational records. It’s critical to have clean, organized, and transparent documentation ready to avoid unexpected challenges that can delay or derail the sale. Compliance with controlled substance laws and New Hampshire-specific regulations is also closely examined.