Guide to Selling a Physical Therapy Practice in Denver, CO

The market for selling a physical therapy practice in Denver is strong, but realizing your practice’s full value requires strategic preparation. This guide gives you a clear overview of the Denver market, how practices are valued, and what to expect during the sale process. Understanding these key areas is the first step toward a successful and rewarding transition for you and your legacy.

A Growing Market for Denver PT Practices

If you own a physical therapy practice in Denver, you are in a favorable position. The local market is supported by strong, long-term trends that make established practices attractive to a wide range of buyers, from private equity groups to individual practitioners looking to own their own clinic.

Strong Local Demand and Talent

Colorado’s demand for physical therapists is robust. Projections show a 25% growth in employment for PTs between 2022 and 2032. This deep talent pool is a major asset for buyers. It gives them confidence that they can staff the practice for future growth. A stable, well-trained team is a significant value driver for your business.

Technological Edge

The physical therapy field is evolving. Practices that incorporate modern technology like telehealth platforms, wearable sensors for patient monitoring, or virtual reality for rehabilitation are seen as more advanced. Buyers often look for businesses that are not just profitable today but are also prepared for the future of patient care.

Beyond the Numbers: What to Prepare For

Selling your practice is more than a financial transaction. It’s a process that affects your staff, your patients, and your personal legacy. From the very first conversation, maintaining confidentiality is critical. Any premature leak of a potential sale can create uncertainty among employees and patients, which can damage the practice’s value. You should also prepare for an intense due diligence period. Buyers will scrutinize every aspect of your business, from financial records to an-d referral sources. Having a clear, well-documented plan for transitioning patient care and practice leadership is not just a courtesy. It is a core component of what a buyer is willing to pay for.

What Denver PT Practices are Selling For

While the final sale price of a private practice is usually confidential, public listings give us a snapshot of the current market. It is important to remember that an asking price is not a sale price. It is the starting point for negotiations. Still, these examples from the Denver area show the range of practices currently on the market.

This range shows that every practice is unique. A lower asking price might reflect a motivated seller, smaller size, or lower profitability. Higher revenues or profits typically support a higher potential valuation. We find the real story is often hidden in the financial details.

The Path to a Successful Sale

The journey of selling your practice follows a structured path. It starts long before you talk to a single buyer. The first phase is preparation, where you get your financials in order and get a professional valuation to understand your practice’s true worth. Next, we would move to confidentially marketing the practice to a curated list of qualified buyers. This creates a competitive environment. Once offers are received, the negotiation and due diligence stage begins. This is the most intensive part of the process. Finally, after all terms are agreed upon and contingencies are met, the process moves to closing, where legal documents are signed and the transition of ownership becomes official.

Uncovering Your Practices True Value

Determining the value of your physical therapy practice is not about a simple revenue multiple. Sophisticated buyers look deeper. They focus on a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure normalizes your profits by adding back owner-specific expenses, giving a true picture of the practice’s cash flow. Your final valuation is typically this Adjusted EBITDA number multiplied by a specific factor.

Here are some key drivers that influence that multiple:
1. Scale and Profitability. Practices with over $1M in EBITDA often command higher multiples than smaller ones because they are seen as less risky.
2. Provider Dependence. Is the practice’s success tied to you, the owner? Or do you have associate therapists who drive significant revenue? Less owner-dependence means higher value.
3. Payer Mix. A healthy mix of commercial insurance and private pay is often viewed more favorably than a heavy reliance on a single government payer.
4. Growth Trajectory. A practice with a documented history of growth and a clear path for future expansion is always more attractive to a buyer.

Life After the Sale: Planning Your Transition

Your role does not always end the day the sale closes. Many deals include a transition period where you stay on for a set time to ensure a smooth handover of relationships and operations. Some sale structures, particularly with private equity buyers, may also include an earnout or rollover equity. An earnout gives you additional payments if the practice hits future performance targets. A rollover means you retain a minority ownership stake, giving you a chance for a second, often larger, payout when the new platform sells again in the future. Planning for these possibilities ahead of time is key to structuring a deal that aligns with your personal and financial goals for the next chapter of your life. Every practice sale is unique, and having a clear strategy is the best way to ensure your success.