Guide to Selling a Urology Practice in Memphis, TN

The market for urology practices in Memphis is changing. With growing interest from private equity and other large groups, the opportunity to secure your financial future and legacy has never been more real. Understanding your options is the first step toward a successful sale. This guide walks you through the current landscape, from valuing your practice to navigating the final transition, so you can make an informed decision on your terms.

Market Overview

As a urology practice owner in Memphis, you operate in a unique and valuable market. The city is a well-established healthcare hub for the Mid-South, which means there is a consistent, high demand for specialized services like yours. This local strength is amplified by national trends.

Across the country, the urology field is facing a potential shortage. With over 26% of urologists at or near retirement age, established practices are becoming more valuable. Large physician groups, hospitals, and private equity investors see this. They are actively seeking to partner with or acquire stable practices to secure their presence in key markets like Memphis. This environment creates significant opportunity, but it also means you will be dealing with sophisticated buyers.

Key Considerations for Your Sale

A successful sale doesn’t happen by accident. It is the result of careful planning. When you begin to think about your transition, focus on these three areas.

Strategic Timing

The value of your practice is highest when you are not in a rush to leave. We find the ideal time to start the planning process is 3 to 5 years before your target retirement date. This gives you time to get your financials in order, explore all your options, and negotiate from a position of strength. Waiting until the last minute can lead to a lower valuation as buyers may worry about patient attrition.

Financial Readiness

Potential buyers will look closely at your financial records. They want to see stable revenue, a healthy payer mix, and reasonable overhead. Preparing for a sale is a good time to “normalize” your books by adjusting for any personal expenses run through the practice. This process gives a clearer picture of profitability and can directly increase your valuation.

Choosing Your Partner

What you are truly selling is the future of your practice and the care of your patients. Years ago, a younger physician might have been the obvious buyer. Today, they are often employed and less interested in taking on business risk. The most common buyers are now other physician groups, local hospitals, or private equity-backed platforms looking to expand their footprint in Memphis.

Market Activity

The Memphis urology market is not just warming up; it is already active. In late 2023, one of the area’s largest practices, the Conrad Pearson Clinic, announced its partnership with Urology America, a platform backed by private equity. This was a significant event, signaling that sophisticated national buyers see major potential right here in Memphis.

This transaction is part of a larger trend. Investors are drawn to urology because of its strong fundamentals. An aging population guarantees patient demand, and the shift toward efficient outpatient settings and ancillary services (like imaging and pathology) offers clear pathways for growth. This activity shows that there is a strong appetite for well-run urology practices in our region. For independent owners, this means more options and greater negotiating power than ever before.

The Sale Process at a Glance

Selling your practice follows a structured path. While every deal is unique, the journey generally involves these core stages. Knowing them ahead of time helps you prepare for what is to come.

Properly navigating each stage is critical. Many practice owners find that the due diligence phase, in particular, is where having an experienced guide makes all the difference.

Getting to Your True Valuation

A common question we hear is, “What is my practice worth?” The answer is more complex than a simple revenue multiple. Sophisticated buyers value your practice based on a key metric: Adjusted EBITDA. This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

Think of it as your practices true profitability. We calculate it by taking your net income and adding back things like your salary (if it’s above market rate), personal car leases, or other one-time expenses. This “normalized” profit figure is then multiplied by a number based on market conditions and risk. Factors that drive a higher multiple include having multiple providers, a strong payer mix, and opportunities for growth. For a healthy practice, this multiple can often range from 5.5x to 7.5x, but determining the right number requires deep market knowledge.

Life After the Sale

The transaction does not end the day the papers are signed. A successful transition ensures your legacy continues, your staff is secure, and you are comfortable with your new role. Planning for life after the sale is as important as planning for the sale itself.

Here are three key areas to consider with your advisory team.

1. Your Transition Role. Most deals require the selling physician to stay on for a period of time to ensure a smooth handover of patient and referral relationships. Your role, compensation, and schedule during this period are all key points to negotiate upfront.
2. The Future of Your Staff. Your dedicated staff is one of your practice’s most valuable assets. A buyer who recognizes this is often a good sign. We help structure agreements that protect your team and create a stable environment for them through the transition.
3. Your Financial Next Chapter. The structure of your deal has major implications. Some owners choose to “roll over” a portion of their equity into the new, larger company, giving them a second potential payday when that company is sold later. Understanding these options is key to maximizing your long-term financial outcome.