The decision to sell your integrated speech and occupational therapy practice is significant. In Colorado, favorable market conditions have created a unique window of opportunity for practice owners. This guide provides a direct look at the current market, key valuation drivers, and the strategic steps involved in a successful sale. Proper navigation is key to turning your hard work into a rewarding legacy.
Market Overview
The market for therapy practices is not just healthy; it’s expanding rapidly. The combined U.S. market for speech, occupational, and physical therapy services represents a nearly $65 billion industry, with the speech therapy segment alone projected to almost double by 2032. This national trend is felt strongly in Colorado, where demand for integrated pediatric and adult therapy services is high.
This growth has attracted a diverse group of motivated buyers. These are not just other local practices looking to expand. We see an increasing number of sophisticated private equity firms and large strategic platforms actively seeking to acquire well-run therapy practices. For you, the seller, this means more potential bidders and a competitive environment that can drive up value. It also means you will be dealing with experienced dealmakers.
Key Considerations
Beyond market trends, a successful sale depends on having your house in order. For a Colorado therapy practice, buyers will focus intensely on a few key areas that require careful preparation.
Navigating Colorado Regulations
Your practices good standing with the Department of Regulatory Agencies (DORA) is non-negotiable. A buyer will perform due diligence to confirm that every therapist is properly licensed under the Colorado Practice Acts for both occupational therapy and speech-language pathology. Any past or pending issues must be disclosed and resolved. This includes adherence to state telehealth policies if you offer virtual services.
Proving Your Payer Strength
Your status as an approved Health First Colorado (Medicaid) provider is a major asset. Buyers will scrutinize your compliance with all state Medicaid regulations, including billing and supervision guidelines. A clean record and a diversified payer mix, including private insurance and private pay, signal a stable, low-risk revenue stream that is highly attractive.
Securing Your Team and Legacy
A buyer isn’t just acquiring assets; they are acquiring a functioning clinical team. The stability and quality of your therapists are one of your practices most valuable components. Demonstrating low turnover and a strong, positive culture gives buyers confidence that the practice will continue to thrive after you exit. Planning for this transition protects both your team and your legacy.
Market Activity
The buyer landscape today is very different than it was a decade ago. While sales to other local therapists still happen, the dominant force in the market is the professional investor. This includes private equity (PE) groups building regional or national therapy platforms and larger healthcare companies (strategics) looking to add therapy services. These buyers bring significant capital and a clear playbook for growth.
This shift changes what it means to be “ready to sell.” These groups are not looking for a fixer-upper. They use a professional lens to evaluate practices on specific metrics: consistent financial performance, efficient operations, a strong referral network, and clear potential for future growth. They are buying a platform, not just a job. Understanding how to present your practice in these terms is the key to attracting premium offers from the most serious buyers.
Sale Process
Selling a practice is not a single event but a structured process. When managed correctly, it protects your confidentiality and creates a competitive dynamic to maximize your outcome. While every sale is unique, the journey typically follows four key stages.
-
Valuation and Preparation. This initial phase is about understanding what your practice is truly worth and preparing it for scrutiny. It involves organizing financial statements, normalizing earnings, and creating a compelling narrative about your practices strengths and growth opportunities. This is the foundation for everything that follows.
-
Confidential Marketing. Your advisor confidentially presents the opportunity to a curated list of qualified buyers. This is done without revealing your practice’s identity until potential buyers have been vetted and signed a non-disclosure agreement. The goal is to generate interest from multiple parties simultaneously.
-
Negotiation and Due Diligence. After initial offers are received, you negotiate the key terms of the deal. Once an offer is accepted, the buyer begins a formal due diligence process, where they verify all financial, operational, and legal information. This is often the most intensive phase and the point where many deals encounter unexpected challenges without proper preparation.
-
Closing and Transition. The final stage involves the execution of legal documents, the transfer of funds, and the official change of ownership. A well-planned process also includes a clear transition plan for you, your staff, and your patients.
Valuation
The most common question we hear is, “What is my practice worth?” The answer is based on a simple formula: Adjusted EBITDA x a Valuation Multiple. While the formula is simple, arriving at the right numbers is complex. Adjusted EBITDA is your real cash flow, calculated by taking your net income and adding back interest, taxes, depreciation, amortization, and any owner-specific or one-time expenses.
The multiple is where the story of your practice comes in. It reflects the quality and risk of your earnings. Buyers will pay a higher multiple for practices that are less risky and have more growth potential. Many factors influence this multiple.
| Factor | Impact on Valuation Multiple | Why It Matters to a Buyer |
|---|---|---|
| Provider Reliance | Strong Negative | A practice dependent on the owner is a high-risk purchase. |
| Diverse Service Mix | Strong Positive | Integrated ST and OT services signal a comprehensive care model. |
| Stable, Licensed Staff | Strong Positive | Reduces transition risk and ensures continuity of care. |
| Strong Referral Network | Positive | Demonstrates a sustainable source of new patients. |
| Disorganized Financials | Negative | Creates uncertainty and signals operational weaknesses. |
Most owners undervalue their practice because they look at net income, not professionally prepared Adjusted EBITDA. An expert valuation process can often uncover significant hidden value before you ever go to market, ensuring you sell based on your practice’s true potential.
Post-Sale Considerations
The day your practice sale closes is not an ending. It is the beginning of a new chapter for you, your finances, and your team. A well-structured deal considers what happens long after the papers are signed. Modern deals often include components that extend beyond the cash you receive at closing. You might see an “earnout,” which provides additional payments if the practice hits certain performance targets, or “rollover equity,” where you retain a minority stake in the new, larger company.
This rollover can be powerful, giving you a “second bite at the apple” when the entire platform is sold again in the future. Negotiating these elements is critical. It allows you to align your exit with your personal and financial goals, whether that means staying on for a few years in a clinical role, securing your teams future, or making a clean break. The right strategy ensures the transition protects the legacy you have built.
Frequently Asked Questions
What makes the current market favorable for selling a Speech & Occupational Therapy Integration practice in Colorado?
The market for therapy practices in Colorado is expanding rapidly, with a strong demand for integrated pediatric and adult therapy services. This growth attracts a diverse group of motivated buyers, including private equity firms and large strategic platforms, creating a competitive environment that can drive up the value of your practice.
What are the key regulatory considerations when selling a therapy practice in Colorado?
Buyers will focus on your practice’s good standing with the Colorado Department of Regulatory Agencies (DORA). This includes ensuring all therapists are properly licensed under Colorado Practice Acts for both occupational therapy and speech-language pathology. Any past or pending regulatory issues must be disclosed and resolved. Compliance with state telehealth policies is also critical if virtual services are offered.
How does being an approved Health First Colorado (Medicaid) provider impact the sale?
Being an approved Medicaid provider is a significant asset as buyers scrutinize compliance with Medicaid regulations, including billing and supervision guidelines. A clean record combined with a diversified payer mix, including private insurance and private pay, signals a stable and low-risk revenue stream that is highly attractive to buyers.
What factors influence the valuation multiple for a Speech & Occupational Therapy practice in Colorado?
Several factors influence the valuation multiple, including:
– Provider reliance (high reliance on the owner lowers value)
– Diverse service mix (offering both speech and occupational therapy increases value)
– Stable, licensed staff (reduces transition risk and ensures continuity)
– Strong referral network (demonstrates sustainable patient sources)
– Organized financials (disorganized financials create uncertainty and reduce value)
Experts use Adjusted EBITDA multiplied by these factors to determine the practice’s true worth.
What are important post-sale considerations for sellers?
Post-sale considerations often include negotiating components such as earnouts, which provide additional payments if the practice meets performance targets, and rollover equity, allowing sellers to retain a minority stake in the new company. These elements can align the sale with personal and financial goals, support transition roles, and protect the legacy by securing the team’s future.