Guide to Selling a Primary Care Practice in Ohio

Selling your primary care practice is one of the most important financial decisions of your career. For physicians in Ohio, the current market presents both unique opportunities and specific challenges. This guide provides a clear overview of the process, from understanding your practice’s true value to navigating the transition. We will help you understand the key factors that will define a successful sale on your terms.

Market Overview

A Changing Landscape

The market for primary care practices in Ohio is active. We see a consistent trend of consolidation, where larger hospital systems, national healthcare groups, and private equity-backed platforms are looking to expand their footprint. These groups are attracted to the stable, recurring revenue and essential community role of primary care. For established independent practices, this means there is a ready pool of well-capitalized buyers actively seeking acquisition opportunities in the state.

What This Means for You

This competitive environment can be a significant advantage for a prepared seller. Multiple interested parties can lead to better terms and higher valuations. However, it also means that buyers are more sophisticated. They perform deep analysis and expect a professional process. Understanding how to position your practice to appeal to these different buyer types is crucial for maximizing your outcome in today’s Ohio market.

Key Considerations

Before you even think about putting your practice on the market, the most important work begins. A successful sale is built on a foundation of thorough preparation. This means getting your financial and legal house in order. Buyers will scrutinize your last 3-5 years of financial statements. Having clean, adjusted Profit & Loss statements that clearly show the practice’s true profitability is a must. This process involves ‘normalizing’ earnings by removing personal or one-time expenses. Beyond the numbers, much of your practice’s value lies in its goodwill. This includes your patient base, community reputation, and efficient operational systems. Documenting these intangible assets is just as important as itemizing your physical equipment. A clear story about your practice’s health and growth potential is what attracts premium offers.

Market Activity

Buyer interest in Ohio’s primary care sector remains strong, driven by the desire for stable healthcare platforms. We are seeing sophisticated buyers, including private equity groups and strategic health systems, compete for well-run practices. This competition supports healthy valuations, but the final price depends heavily on the practice’s financial performance and strategic position. The key metric buyers use is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Below are typical valuation ranges we see in the current market.

These multiples are not fixed. They can be influenced by factors like provider mix, payer contracts, and documented growth opportunities.

Sale Process

The path from deciding to sell to closing the deal follows a structured process. It starts with a comprehensive valuation and the creation of marketing materials, like a confidential summary highlighting your practice’s strengths. The next phase involves privately marketing the opportunity to a curated list of qualified buyers, rather than listing it publicly. This protects your confidentiality and creates a competitive environment. Once offers are received, you move into negotiations, followed by the signing of a Letter of Intent. The final, and often most intensive, stage is due diligence, where the buyer verifies all financial, legal, and operational information. A well-managed process anticipates buyer questions and ensures a smooth journey to the closing table.

Valuation

Determining what your primary care practice is worth is more than a formula. It’s about understanding its true earning power. Buyers value a practice based on its Adjusted EBITDA, which is your profit after adding back personal expenses or a higher-than-market owner’s salary. This adjusted profit is then multiplied by a number (the “multiple”) that reflects market demand and perceived risk. It is not just one thing that determines this multiple. Several key factors impact your final valuation.

A few of the most important factors include:
1. Provider Dependence: Practices that do not rely solely on the owner command higher multiples. Having associate physicians or mid-level providers demonstrates a durable business model.
2. Growth Potential: A clear, believable story for how a new owner can grow the practice is a major value driver. This could be through adding services, improving marketing, or expanding hours.
3. Payer Mix and Revenue Quality: A healthy mix of payers and stable revenue streams is more attractive than a practice with high revenue concentration from a single source.

Post-Sale Considerations

The work is not over once the sale contract is signed. A successful transition is critical to protecting your legacy and ensuring the continued success of the practice. This involves a carefully planned communication strategy for both patients and staff. A smooth handover can retain over 85% of your patient base. It is also important to consider your own role. Will you stay on for a period to help with the transition? The terms of this arrangement, along with any non-compete agreements, should be clearly defined in the sale contract. Finally, be aware of state-specific duties. In Ohio, you are legally required to ensure medical records are retained for a minimum of six years, a responsibility that must be addressed in the final agreement.