Executive Summary
The market for urgent care in Ohio is active. Strong consolidation trends and a growing demand for accessible care create significant opportunities for practice owners like you. Selling your practice is more than a transaction. It’s a major milestone that requires careful planning to maximize your financial outcome and secure your legacy. This guide provides a clear overview of the market, key considerations, and the steps involved in a successful sale.
Ohio’s Urgent Care Market: What You Need to Know
The urgent care sector in Ohio is not just stable; it’s growing. National trends, like a 7% annual growth in new centers, are reflected locally as patients increasingly choose the convenience and affordability of urgent care over traditional emergency rooms. This shift has not gone unnoticed by larger players in the healthcare ecosystem, creating a dynamic environment for independent practice owners.
A Market in Motion
The value proposition of urgent care is clear. It reduces the burden on emergency departments and offers accessible healthcare. This has fueled strong consolidation. The sector’s performance during the pandemic further proved its resilience and importance, making these practices highly attractive acquisition targets. For you, this means your practice is likely more valuable now than ever before.
The Buyer Landscape
Buyers in Ohio range from large hospital systems looking to expand their outpatient footprint to private equity-backed groups seeking to build regional platforms. Mercy Health’s recent acquisition of 10 urgent care facilities in Toledo is a perfect example of this trend. Each type of buyer has different goals and offers different deal structures. Understanding this landscape is the a key part of positioning your practice for the best possible outcome.
3 Key Considerations When Selling Your Ohio Practice
As you contemplate a sale, the big picture of the market is important. However, the success of your transaction will come down to the details of your specific practice. Here are three areas that require your attention early in the process.
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Your Financial Story. Buyers are not just buying your practice. They are buying its future cash flow. Your financial records need to be clean and tell a clear story of profitability. This goes beyond simple profit and loss statements. You need to understand your practice’s Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric normalizes for owner-specific expenses and is the foundation of your valuation. Getting this right is a critical first step.
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Ohio’s Regulatory Rules. The state of Ohio has specific rules about how you must notify patients when selling a practice. According to the Ohio Administrative Code, you are required to provide clear information about their continued care and how their medical records will be handled. Failing to manage this process correctly can create legal headaches and jeopardize a smooth transition for both your patients and the buyer.
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Your Team’s Future. Your staff is one of your most valuable assets. A buyer will look closely at your staffing model, provider dependencies, and employee retention rates. A practice that can run smoothly without being entirely dependent on the owner is far more attractive. Planning for staff retention and communicating the transition properly protects your team and your practice’s value.
Market Activity and Timing Your Sale
The current market is defined by high demand from buyers. This activity directly impacts both practice valuations and the strategic window for you to sell.
What Are Buyers Paying?
Valuation multiples for urgent care centers are strong, sometimes ranging from 6x to over 10x of Adjusted EBITDA. However, this is not a simple calculation. The final multiple depends on your practice’s size, revenue trends, profitability, payer mix, and location within Ohio. A practice with multiple locations and a diverse team of providers will command a higher multiple than a solo practice. This is why a comprehensive valuation is so important. It shows you not only what your practice is worth today, but how to increase its value before a sale.
The Risk of Waiting
Many owners think they will sell in 2-3 years, so they put off planning. This is a mistake. Buyers pay for proven performance, not potential. The work you do in the years leading up to a sale to optimize your operations, clean your financials, and document your growth is what earns a premium valuation. Starting the process now ensures you sell on your terms, not a buyer’s.
The Anatomy of a Practice Sale
Selling a medical practice is a structured process with distinct phases. Each stage presents unique opportunities and potential challenges. Understanding this road map helps you prepare for the journey ahead. While every sale is unique, most follow this general framework.
| Stage | What It Involves | Where an Advisor Helps |
|---|---|---|
| 1. Preparation & Valuation | Gathering documents, cleaning financials, and getting a professional valuation. | Normalizing EBITDA and creating a narrative that maximizes value from the start. |
| 2. Confidential Marketing | Identifying and approaching a curated list of qualified buyers under a non-disclosure agreement. | Accessing a proprietary network of buyers to create a competitive bidding environment. |
| 3. Negotiation & Due Diligence | Structuring a deal (Letter of Intent) and then undergoing the buyer’s deep financial and legal review. | Navigating complex deal terms and preparing you for due diligence to avoid surprises. |
| 4. Closing & Transition | Finalizing legal agreements, transferring assets, and managing the post-sale transition plan. | Ensuring a smooth handover for patients, staff, and your own financial future. |
The due diligence phase is often where a promising deal can fall apart. Proper preparation is the best way to prevent this.
How Is Your Urgent Care Practice Valued?
Many practice owners believe valuation is a simple formula based on revenue. The reality is more sophisticated. Sophisticated buyers value your practice based on the quality and reliability of its future earnings. At SovDoc, we see this as equal parts math and market storytelling.
Beyond the Rule of Thumb
The core metric is Adjusted EBITDA. We start with your net income and add back interest, taxes, depreciation, and amortization. Then, we “normalize” it by adjusting for any expenses that a new owner would not incur, like an above-market owner’s salary or personal car lease. This adjusted figure gives a true picture of the practice’s profitability. A common mistake is to overlook this step, which often leaves significant value on the table.
Key Value Drivers
The Adjusted EBITDA is then multiplied by a numberthe “multiple.” This is where the story comes in. The multiple is not fixed. It changes based on several factors:
* Scale: Practices with over $1M in EBITDA often see higher multiples (e.g., 5.5x 6x) than smaller ones.
* Provider Model: An associate-driven practice is less risky for a buyer than one dependent on a single owner.
* Growth: A proven history of patient volume growth is a powerful value driver.
* Payer Mix: A healthy mix of commercial insurance payers is seen as more stable than high concentrations of a single payer.
An expert valuation uncovers and highlights these drivers to justify the highest possible multiple.
Life After the Sale: Planning Your Transition
The day you close the sale is not the end of the journey. A successful transaction includes a well-designed plan for what comes next, both for the practice and for you personally. Thinking about these elements beforehand ensures your goals are met.
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Ensuring Continuity of Care. Your obligation to your patients continues through the transition. A carefully managed communication plan for patient notification and record transfer, compliant with Ohio law, is critical for protecting your reputation and ensuring a smooth handover.
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Structuring Your Role. Selling doesn’t always mean walking away. Many owners choose to stay on for a period of time. Deals can be structured to keep you in a leadership role. Some owners even retain a portion of ownership (an “equity rollover”), giving them a “second bite of the apple” when the new, larger entity is sold again in the future. This is a powerful way to participate in the future growth you helped create.
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Optimizing Your Financial Outcome. The structure of the sale has major tax implications. How the deal is classifieds an asset sale or an entity salesman significantly change your net proceeds. Planning this with an advisor who understands healthcare M&A ensures you don’t pay more in taxes than necessary. Your future financial security depends on getting this part right.
Frequently Asked Questions
What is the current market trend for selling Urgent Care practices in Ohio?
The urgent care sector in Ohio is growing, reflecting national trends of about 7% annual growth in new centers. There is strong consolidation as larger healthcare players acquire smaller independent practices, making urgent care centers highly attractive acquisition targets due to their demonstrated resilience and importance during the pandemic.
What financial information should I prepare before selling my Urgent Care practice in Ohio?
You should have clean financial records focusing on your practice’s Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric normalizes owner-specific expenses and is the foundation of your practice’s valuation. Properly documenting profitability beyond simple profit and loss statements is essential to maximize your financial outcome.
What are some legal obligations regarding patient notification when selling an Urgent Care practice in Ohio?
According to Ohio Administrative Code, you must notify patients about changes, including how their continued care will be managed and how their medical records will be handled. Managing this patient notification process correctly is crucial to avoid legal issues and ensure a smooth transition for both patients and the buyer.
How is an Urgent Care practice valued in Ohio?
Valuation is primarily based on the practice’s Adjusted EBITDA multiplied by a valuation multiple, which depends on factors such as the scale of the practice, provider model, growth history, and payer mix. Larger practices with over $1M EBITDA, associate-driven models, steady patient growth, and diverse commercial insurance payers typically receive higher multiples.
What should I consider for life after selling my Urgent Care practice?
Post-sale planning involves ensuring continuity of patient care with compliant patient notification and record transfer, deciding if you want to remain with the practice in a leadership role or retain ownership equity, and structuring the sale to optimize financial outcomes including tax implications. Consulting with a healthcare M&A advisor can help align the exit approach with your personal and financial goals.
