How to sell a physical therapy practice?

Physical therapy is an active consolidation vertical, so most owners selling a clinic have a real buyer pool. The process runs in six steps: prepare two to three years of clean financials with a defensible adjusted EBITDA or SDE number and documented add-backs; set a valuation anchored to current PT multiples; package a short anonymous teaser and a fuller confidential information memorandum (CIM) shared only under NDA; approach qualified buyers — primarily private-equity-backed PT and outpatient-rehab platforms (often acquiring through a management services organization, or MSO), regional multi-clinic groups, and in some markets hospital or orthopedic systems; negotiate a letter of intent (LOI) that sets price and structure; then complete due diligence and close. Most sales run about 6-12 months from preparation to close, with roughly 4-6 months from signed LOI to closing.

On price, PT practices typically sell for about 4.0x-7.0x EBITDA, or roughly 2.5x-4.5x SDE for single-clinic, owner-operated practices, with most deals falling in the $300K-$4M range. Placement within the band follows transferability: a broad physician referral network rather than one orthopedic group, multiple treating therapists so visit volume survives the owner stepping back, a sports-medicine or specialty focus, and modern rehabilitation equipment all argue for the top of the range. The most common discounts are a single-therapist practice, single-payer concentration, limited specialization, and a weak location.

Insurance-model and cash-pay clinics both sell, but to different buyers. The most acquisitive platforms underwrite in-network, insurance-reimbursed visit volume — commercial contracts, Medicare, and a manageable share of workers' comp — because that is the revenue they can grow on better contracted terms at scale. Cash-pay and concierge practices are real businesses with a smaller buyer pool and are generally valued more conservatively; heavy personal-injury or attorney-lien revenue is the hardest fit for today's active buyers.

Deal structure in PT commonly lands at roughly 75-85% cash at close with a 15-20% seller note, and platform buyers usually ask the selling clinician to stay through a transition — often rolling some equity — especially where the owner drives a large share of visits. On taxes, federal long-term capital gains generally run about 15%-20% plus state tax; the 3.8% net investment income tax may not apply to an owner who materially participates in the practice, so specifics belong with the owner's CPA.

Buyer activity and practice-sale rules vary by state, so DealSeam maintains state-specific guides to selling a physical therapy practice in Arizona, California, Nevada, Oregon, and Washington (linked below), alongside its physical therapy valuation and buyer guide. DealSeam is a deal origination company, not a traditional business broker: it introduces practice owners to qualified buyers where there is a fit, and the buyer pays the success fee, so sellers pay nothing.