What is the average EBITDA multiple for PT clinics?
Physical therapy clinics typically sell for 5x to 7x EBITDA for single-location and add-on acquisitions, and 7x to 9x EBITDA for multi-location platforms with $1M+ in EBITDA.
Definition
A physical therapy EBITDA multiple is the price-to-earnings ratio buyers pay for outpatient PT practices.
The detail
PT has been one of the busier healthcare M&A segments since 2018, but 2025 saw the first PT platform sale clear under 7x in five years as rates rose. Single-location and add-on deals clear 5x to 7x EBITDA, usually as asset purchases with seller financing on the smaller end. Regional platforms and multi-location groups with $1M+ in EBITDA price at 7x to 9x in recent PE deals. Cash-pay sports medicine clinics command a premium versus Medicare-heavy general PT, where reimbursement risk is priced in. CMS rate history on the core PT codes 97110-97140: -1 percent in 2022, -2 percent in 2023, -3.4 percent in 2024 — buyers underwrite further cuts every year. The biggest discount factor is Medicare exposure above 50 percent. Pelvic health and neuro clinics with diversified commercial payer mix price higher. Top PE-backed platforms acquiring in 2026: ATI Physical Therapy, Athletico, Upstream Rehabilitation, Confluent Health, Ivy Rehab, FYZICAL. Regional roll-ups continue acquiring single and two-clinic owners.
| Deal Type | Multiple Range | Typical Profile |
|---|---|---|
| Single-location / add-on | 5x – 7x | Asset purchase, often with seller financing |
| Regional platform ($1M+ EBITDA) | 7x – 9x | Multi-location group, recent PE deal |
| Cash-pay sports medicine premium | +0.5x – 1.5x | Diversified payer mix, lower Medicare exposure |
| Medicare-heavy discount | −0.5x – 1.5x | Above 50% Medicare exposure |
CMS cut PT codes 97110-97140 by -1% (2022), -2% (2023), -3.4% (2024). Buyers underwrite further cuts every year, which compresses multiples on Medicare-heavy practices.
Private equity ownership of outpatient PT has grown every year the APTA Practice Profile Survey has tracked it.
Source: APTA Practice Profile
CMS cut outpatient therapy reimbursement again in the 2024 Physician Fee Schedule, following similar cuts in 2022 and 2023.
Source: CMS Physician Fee Schedule
Pitchbook has ranked outpatient PT as one of the most active healthcare PE verticals every year since 2020.
Source: Pitchbook Healthcare Services
What this means for clinic owners
From Sorso
If you own one PT clinic, the fastest way to grow your multiple is opening or buying locations two and three. Buyers pay more for operations that do not collapse when the owner leaves, and a single-location practice usually does.
Related questions
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).
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 the difference between platform and add-on multiples?
Platform acquisitions trade at 8x to 14x EBITDA — the buyer pays for scale, infrastructure, and management. Add-on acquisitions trade at 4x to 7x EBITDA because they bolt onto an existing platform. The same practice can be worth 2× more depending on which the buyer needs.
What is the 8-minute rule in physical therapy billing?
The 8-minute rule is a Medicare billing rule that determines how many timed CPT units (97110, 97140, etc.) a PT can bill based on total minutes spent on direct one-on-one timed services, with a single unit billable at 8 minutes minimum.
What is a working capital peg in an M&A deal?
A working capital peg is the target level of net working capital the buyer expects at close; delivery above or below the peg results in a dollar-for-dollar purchase price adjustment, typically reducing a headline price by 3 to 8 percent at close.
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.
Founder of Sorso. 19 years in corporate finance. Managed a $450M loan portfolio before building a fractional CFO firm exclusively for healthcare clinics.
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