Selling your Sports Medicine & Performance Therapy practice is one of the most significant financial decisions you will make. The San Diego market is active, presenting a unique window of opportunity for owners who are properly prepared. This guide provides a straightforward overview of the current landscape, what buyers are looking for, and how to navigate the complexities of a sale to protect your legacy and maximize your outcome. We can help you understand all of your options.
Market Overview
The market for selling a sports medicine practice in San Diego is strong. This is not a coincidence. It is driven by powerful local and national trends that well-positioned practice owners can leverage.
A Thriving Local Market
San Diego’s culture is built around an active lifestyle. This creates a consistent and growing patient base for sports medicine and performance therapy. Demand for physical therapist services is forecasted to grow much faster than the general population. This makes practices like yours fundamentally attractive to buyers looking for stable, long-term growth in a vibrant community.
National Trends, Local Impact
Across the country, the physical therapy sector is consolidating. Larger strategic groups and private equity firms are actively acquiring successful local practices to build regional density. They see the value in established brands and patient relationships. This trend is very active in California, meaning there is a competitive pool of sophisticated buyers looking for high-quality practices in the San Diego area right now.
Key Considerations for San Diego Sellers
In a competitive market, a buyer looks beyond your revenue. They are buying the entire business. How you present your practice’s story and operational health can significantly impact your valuation. Here are three areas buyers scrutinize in a San Diego practice.
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Your Community Reputation. A strong brand is a powerful asset. In San Diego, this means more than just a name. It’s your online reviews, your relationships with local sports clubs, and your reputation among referring physicians. We help you quantify this goodwill to reflect its true value.
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The Strength of Your Team. A practice that depends entirely on the owner is a risk for a buyer. A stable team of qualified DPTs and specialists with unique certifications shows the business has value beyond you. It demonstrates a sustainable operational model.
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Your Operational Health. Buyers look for efficiency. Messy billing, inefficient documentation, or inconsistent patient acquisition are red flags. Addressing these common challenges before a sale makes your practice more attractive and can prevent issues during due diligence.
Market Activity
It is one thing to talk about trends. It is another to see them in action. The market for Sports Medicine & Performance Therapy practices is not just active in theory, it is active in practice, right here in Southern California.
Proof of a Seller’s Market
Recently, we have seen significant transactions that prove the strength of the market. For instance, PRN Physical Therapy acquired Spine & Sport Physical Therapy, a major regional player. Even more locally, Empower Physical Therapy, a private-equity-backed group, acquired San Diego-based ProActive Physical Therapy & Sports Medicine. These are not isolated events. They are part of a clear pattern of consolidation.
Finding the Right Buyer
These acquisitions show that buyers are paying premiums for well-run practices in desirable locations like San Diego. The key is running a process that connects you with the right type of buyer for your goals, whether it is a strategic partner who will grow your brand or a financial partner who provides capital for expansion.
The structure of your practice sale has major implications for your after-tax proceeds.
The Sale Process at a Glance
Selling a medical practice is a structured process, not a single event. Each stage has its own purpose and potential pitfalls. Getting it right requires careful planning and execution. We manage this process so you can continue focusing on your patients and staff. Here is a simplified look at the key stages.
| Stage | Focus Area |
|---|---|
| 1. Preparation | Organizing financials, normalizing EBITDA, and building the story of your practice. |
| 2. Confidential Marketing | Identifying and discreetly approaching a curated list of qualified buyers. |
| 3. Negotiation | Securing competitive offers and structuring a deal that meets your financial and personal goals. |
| 4. Due Diligence | Managing the buyer s intensive review of your finances, operations, and legal standing. |
| 5. Closing & Transition | Finalizing legal documents and ensuring a smooth handover for your team and patients. |
The due diligence phase is where many self-managed sales fall apart. Proper preparation is the best way to ensure a smooth closing.
Understanding Your Practice’s Value
Many owners mistakenly believe their practice’s value is a simple multiple of revenue. Sophisticated buyers, especially private equity groups, do not think that way. They value your practice based on its profitability and future cash flow, which we measure using a key metric.
It’s More Than Revenue
The foundation of a modern valuation is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow. We calculate it by taking your net income and adding back owner-specific expenses, such as an above-market salary or personal vehicle costs. Normalizing your earnings this way often reveals a much higher profitability than you might see on a standard P&L statement.
What Drives Your Multiple
This Adjusted EBITDA is then multiplied by a number the “multiple.” This is not a fixed number. It changes based on several factors:
* Scale: Practices with higher EBITDA command higher multiples.
* Provider Mix: A multi-provider, associate-driven model is less risky and more valuable than a solo-owner shop.
* Growth: A clear path to future growth, whether through adding services or locations, will earn a premium multiple.
* Operational Systems: Strong, documented systems for billing and patient acquisition increase value.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
A successful sale is not just about the price you get at closing. It is also about setting up your team, your legacy, and your own financial future for what comes next. Thinking about these things early is a mark of a well-planned transition.
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Ensuring a Smooth Transition. Your staff and patients are the heart of your practice. A key part of any deal is creating a thoughtful transition plan that protects your team and ensures continuity of care for the community you have served. This protects your legacy.
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Preserving Your Role (If You Want It). Selling does not always mean walking away. Many deals, especially with private equity partners, are structured to keep you involved. Through an equity rollover, you retain a minority stake, giving you a “second bite at the apple” when the new, larger entity sells again in the future.
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Optimizing Your Financial Outcome. The structure of your sale has massive implications for your after-tax proceeds. Planning for earnouts, understanding tax liabilities, and structuring the deal correctly from the start can make a significant difference in your net financial outcome.
Every practice is unique. Your personal goals should drive the entire strategy, from valuation to the final handshake.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What is the current market like for selling a Sports Medicine & Performance Therapy practice in San Diego?
The San Diego market for selling sports medicine practices is strong and active, driven by local demand for physical therapy services and national consolidation trends. Buyers, including strategic groups and private equity firms, are interested in acquiring high-quality, well-run practices in this vibrant community.
What key factors do buyers consider when evaluating a practice in San Diego?
Buyers look beyond revenue and focus on three main areas: 1) Community reputation including online reviews and relationships with local sports clubs and referring physicians, 2) The strength and stability of the team, especially the presence of qualified therapists beyond the owner, and 3) Operational health including efficient billing, documentation, and patient acquisition processes.
How is the value of a Sports Medicine & Performance Therapy practice determined?
Value is primarily based on Adjusted EBITDA, which reflects the practice’s true cash flow after normalizing for owner-specific expenses. This adjusted EBITDA is then multiplied by a variable multiple influenced by practice scale, provider mix, growth potential, and operational systems.
What does the sale process for a Sports Medicine & Performance Therapy practice typically involve?
The sale process includes several key stages: preparation of financials and practice story, confidential marketing to qualified buyers, negotiation of offers, thorough due diligence by buyers, and closing with a smooth transition plan to protect staff, patients, and the seller’s legacy.
How can sellers plan for life after selling their practice?
Sellers should create a transition plan to ensure continuity for staff and patients, consider staying involved through an equity rollover if desired, and optimize their financial outcome by structuring the sale for tax efficiency and potential earnouts. Personalized guidance can help align the sale with the seller’s long-term goals.
