How long does it take to sell a medical practice?
Selling a medical practice to a PE buyer typically takes 6 to 12 months from engagement to close, with 2 to 3 months of prep, 1 to 2 months of marketing, 2 to 3 months of diligence and negotiation, and 1 to 2 months for definitive documents and closing.
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Definition
A medical practice sale timeline is the elapsed time from deciding to sell through to cash in the seller's account, including prep, marketing, LOI, diligence, definitive agreements, and closing conditions.
The detail
A typical PE-backed healthcare practice sale breaks into five phases. Phase 1 (prep, 2 to 3 months): engage banker or advisor, build financial package, commission sell-side QoE, clean up legal and HR files, normalize owner compensation for pitch deck. Phase 2 (marketing, 1 to 2 months): target buyer list, teasers, NDAs, management meetings, initial indications of interest. Phase 3 (LOI and diligence, 2 to 3 months): select preferred bidder, negotiate LOI, enter exclusivity, buyer-side QoE, legal diligence, clinical and regulatory diligence. Phase 4 (definitive agreements, 1 to 2 months): purchase agreement, employment agreements, transition services, real estate, regulatory filings. Phase 5 (closing, 2 to 6 weeks): consents, licenses, payer re-credentialing prep, funding, closing mechanics. Timelines compress for smaller add-on deals (often 4 to 6 months total) and extend for complex multi-location platforms or deals with regulatory complexity (up to 18 months). Sellers who start without prep often add 3 to 6 months fixing issues buyers find in QoE.
What this means for clinic owners
From Sorso
The most common avoidable delay is poor financial hygiene — messy books, uncategorized owner expenses, and unclear related-party rent arrangements. Practices that spend 12 to 24 months cleaning up financials before going to market typically close faster and at higher multiples than practices that try to sell unprepared.
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What does a medical practice valuation cost?
A formal medical practice valuation costs $5,000 to $25,000 depending on practice size, purpose (sale, divorce, partner buy-in, estate), and whether you need a calculation engagement (lower cost, narrower scope) or a full opinion of value (higher cost, defensible in court).
What is the average EBITDA multiple for dental practices?
FOCUS Investment Banking publishes a ladder by adjusted EBITDA with the buyer type named on each rung: under $1M at 5–7×, $1M to $3M at 7–9×, $3M to $5M at 9–11×, and $5M+ at 11×+ in select cases. McLerran & Associates puts platform-grade groups above $5M in adjusted EBITDA at 10x to 12x or more and leaves its lower tiers unnumbered. Neither firm publishes an absolute multiple for orthodontics, oral surgery or pediatric dentistry; McLerran says only that specialty practices run roughly 1 to 3 additional turns of EBITDA above general dentistry at the same size tier. Scale, not clinical quality, is what moves you up the ladder.
What is the average EBITDA multiple for PT clinics?
Breakwater M&A publishes physical therapy (physiotherapy) multiples by adjusted EBITDA: $150K to $500K at 2.5–4x for a single owner-operated location, $500K to $1M at 4–6x once a professional manager is in place, $1M to $3M at 5–7x for a platform practice with a regional footprint, and $3M+ at 6–8x+ for a roll-up target. It sums the whole market up as "2.5x to 8x EBITDA" in 2026. Peak Business Valuation states 3.0x to 6.0x with no size breakdown behind it, so read that as a cross-check on the middle of Breakwater's ladder rather than a band for any one clinic size.
What is a med spa worth?
A medspa or med spa typically sells for 4x to 7x EBITDA for single-location and add-on deals, and 6x to 9x EBITDA for multi-location platforms. Valuations weight heavily toward recurring membership revenue, provider tenure, and injectable mix. Below $500K EBITDA, expect an SDE-based valuation closer to 2x–3x instead.
What is the average EBITDA multiple for an urgent care center?
Scope Research publishes three tiers for urgent care in its 2026 update: smaller single-site and small-portfolio operators at 3x to 7x EBITDA, larger established operators with proven profitability at 6x to 11x, and companies with considerable scale or a value-based and virtual care strategy at 10x to 15x. The caveat Scope attaches to that top tier matters more than the number: the majority of the deals at the high end are from the mid 2010s. Scope describes the tiers by scale and profitability and attaches no revenue bands, so there is no published cut-off that tells you which tier you are in.
How do PE firms value medical practices?
Private equity firms value medical practices primarily on a multiple of trailing twelve-month adjusted EBITDA, typically 5x to 12x, with the multiple driven by scale, growth, payer mix, and provider retention.
What is a quality of earnings report?
A quality of earnings (QoE) report is a buyer-commissioned financial due diligence analysis that normalizes EBITDA, tests the reliability of revenue and expenses, and identifies risks that affect purchase price, typically costing $50K to $150K for a healthcare practice.
What is an LOI in healthcare M&A?
A letter of intent (LOI) in healthcare M&A is a non-binding agreement that sets the proposed purchase price, structure, exclusivity period, and diligence timeline before a buyer commits the resources to close a deal.
What is a data room in healthcare M&A?
A data room is the secure online repository where a seller uploads financial, legal, clinical, and operational documents for buyer diligence, typically containing 500 to 2,000 files organized across 15 to 25 top-level categories.
What is an IOI in healthcare M&A?
An indication of interest (IOI) is a non-binding preliminary bid, usually providing a price range rather than a specific number, submitted after a buyer reviews the confidential information memorandum but before full diligence or LOI.
What is reps and warranties insurance in M&A?
Reps and warranties insurance (RWI) is a buyer-side policy that covers financial losses from breaches of seller representations in the purchase agreement, typically priced at 2.5 to 4 percent of coverage amount for healthcare deals.
Sources
Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.
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