Business Exit Strategies for Physiotherapy Owners: From Solo Practice to Platform Sale
You built your physiotherapy practice from nothing. Now you're thinking about what comes next.
Maybe you're approaching retirement. Maybe you're burned out. Maybe you've taken the business as far as you can alone and want to see what it could become with more resources behind it.
Whatever the motivation, understanding your exit options is the first step toward making a good decision. Not every practice fits every exit strategy, and choosing the wrong path can leave significant value on the table.
This guide walks through the main exit strategies available to physiotherapy owners, from selling to an associate to joining a private equity platform. We'll cover typical valuations, deal structures, and the tradeoffs that come with each approach so you can match the right strategy to your specific situation.
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Why Your Exit Strategy Matters
Your choice of exit strategy affects more than just price. It determines:
How much you walk away with and how that payout is structured (lump sum, seller financing, rolled equity, earn-out)
How long you need to stay involved after closing
What happens to your staff and patients during and after the transition
Your legacy and the long-term direction of the practice
A solo practitioner selling to an associate will have a fundamentally different experience than a multi-location owner joining a PE-backed platform. Neither is inherently better. But one may be significantly better for your specific situation, timeline, and goals.
Exit Strategy 1: Sell to an Associate or Employee
Best for: Solo practitioners, owner-dependent practices, owners who prioritize continuity.
You identify an associate or key employee interested in ownership and structure a buyout over time. This often involves seller financing, where you receive payments over several years rather than a lump sum at closing.
Typical terms:
Valuation: 2.5x to 4x SDE (seller's discretionary earnings)
Structure: 10 to 30% down payment, balance financed over 3 to 7 years
Transition: 6 to 24 months of overlap
Why owners choose this path:
Preserves practice culture and patient relationships
Continuity for staff
The buyer already knows the business inside and out
What to watch out for:
Lower total value than strategic or PE sales
Seller financing carries risk if the buyer underperforms
The pool of qualified, creditworthy internal buyers is often small
Key consideration: This path works best when you have a strong associate who is motivated, capable, and creditworthy. Without that person already in place, internal succession is difficult to pull off on a short timeline. If you're considering this route, start grooming a successor 2 to 3 years before your target exit date.
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Exit Strategy 2: Sell to a Local Competitor or Strategic Buyer
Best for: Practices with a solid patient base, owners who want a cleaner break.
A larger local practice, hospital system, or regional healthcare group acquires your clinic to expand their footprint or eliminate competition. These buyers are purchasing synergies: cost savings or revenue opportunities they can capture by combining your practice with theirs.
Typical terms:
Valuation: 4x to 6x EBITDA (earnings before interest, taxes, depreciation, and amortization)
Structure: Mostly cash at close, sometimes with a small earn-out
Transition: 3 to 12 months
Why owners choose this path:
Faster, cleaner transaction than internal sales
Often higher valuation than selling to an associate
Strategic buyers may pay premiums for geographic fit or specialty coverage gaps
What to watch out for:
Your brand may disappear post-close
Staff roles may change or be eliminated as the buyer consolidates
Less control over post-sale direction
Key consideration: If your clinic fills a geographic gap or adds a specialty a buyer lacks, you're in a strong negotiating position. Approach competitive buyers before they approach you. Selling proactively almost always produces better outcomes than reacting to an unsolicited offer.
Exit Strategy 3: Sell to a Private Equity Platform
Best for: Multi-location practices, owners seeking maximum value, those open to rolling equity.
A PE-backed platform acquires your practice as either a platform deal (the foundational acquisition around which the group is built) or a tuck-in (an addition to an existing platform). Platform deals command higher multiples. Tuck-ins are priced lower but tend to be simpler transactions.
Typical terms:
Valuation: 5x to 9x EBITDA (platform), 4x to 6x EBITDA (tuck-in)
Structure: 70 to 80% cash at close, 20 to 30% rolled equity
Transition: 12 to 36 months, often with an earn-out tied to performance milestones
Why owners choose this path:
Highest potential valuation among all exit options
Rolled equity provides a "second bite of the apple" if the platform grows and sells again at a higher multiple
Access to capital, operational systems, and resources to accelerate growth
What to watch out for:
Longer transition requirements. PE buyers want you running the business post-close.
Loss of day-to-day autonomy
Earn-outs introduce risk if targets aren't met
Key consideration: PE buyers are looking for scale and systems. If you have multiple locations, strong EBITDA margins, and documented operating procedures, you're a more attractive target. Single-location practices are typically valued as tuck-ins, not platforms.
Exit Strategy 4: Recapitalization (Partial Sale)
Best for: Owners who want liquidity now but aren't ready for a full exit.
You sell a majority stake (often 60 to 80%) to a PE firm or strategic partner while retaining a minority interest. You continue to operate the business with the buyer's capital and support behind you.
Typical terms:
Valuation: Similar to a full sale (5x to 8x EBITDA)
Structure: Majority cash, minority equity rollover, management agreement
Transition: Ongoing role as operator, typically 3 to 5 years
Why owners choose this path:
Immediate liquidity while maintaining upside in a growing business
Access to capital and operational expertise you couldn't afford alone
Potential "second bite" at a higher valuation down the road
What to watch out for:
You give up majority control. Your partner's priorities may differ from yours.
Future exit timing may not be your choice
Requires genuine energy and commitment to keep growing
Key consideration: Recaps work best for owners who still have energy and ambition but need capital or operational support to reach the next level. If you're burned out or ready to step away, a full exit is probably the better path.
Exit Strategy 5: Orderly Wind-Down
Best for: Practices with limited transferable value, owners approaching retirement without a viable buyer.
You stop accepting new patients, allow the caseload to decline naturally, and eventually close. You may sell equipment, patient lists, or lease assignments to recover some value.
Typical value recovery:
Equipment, receivables, and possibly the patient list
Timeline: 12 to 36 months
Why some owners default to this path:
No negotiation or deal complexity
Full control over timing
Why it should be a last resort:
Leaves significant value on the table, often tens or hundreds of thousands of dollars
No ongoing legacy
Staff displacement with no transition support
Key consideration: Even small, owner-dependent practices often have more value than owners realize. This is particularly true for local competitors looking to acquire patient relationships and referral networks. Before committing to a wind-down, get a professional valuation. You may be surprised.
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Comparing Your Exit Options at a Glance
| Exit Strategy | Typical Valuation | Cash at Close | Transition Period | Best For |
|---|---|---|---|---|
| Associate / Employee Buyout | 2.5x to 4x SDE | 10 to 30% down | 6 to 24 months | Solo practices, continuity-focused |
| Competitor / Strategic Buyer | 4x to 6x EBITDA | Mostly cash | 3 to 12 months | Strong patient base, clean exit |
| PE Platform Deal | 5x to 9x EBITDA | 70 to 80% | 12 to 36 months | Multi-location, maximum value |
| PE Tuck-In | 4x to 6x EBITDA | 70 to 80% | 6 to 18 months | Single location joining a platform |
| Recapitalization | 5x to 8x EBITDA | 60 to 80% | Ongoing (3 to 5 yrs) | Liquidity + continued growth |
| Wind-Down | Minimal | Equipment/receivables | 12 to 36 months | Last resort only |
How to Choose the Right Exit Strategy
Choosing the right path comes down to three honest assessments.
Step 1: Assess Your Practice
How many locations do you operate?
What is your normalized EBITDA (or SDE for solo practices)?
How dependent is revenue on you personally? If you disappeared for six months, would the practice survive?
Are your systems documented? Clinical protocols, billing, scheduling, compliance?
Step 2: Define Your Goals
Are you optimizing for maximum value, speed, legacy, or continued involvement?
Do you need all cash at closing, or are you comfortable with seller financing or rolled equity?
What is your ideal timeline: 6 months, 2 years, 5 years?
Step 3: Match Strategy to Reality
Solo, owner-dependent practices → Associate buyout or competitor sale
Multi-location with strong EBITDA → PE platform or recapitalization
Single location with good margins → Competitor sale or PE tuck-in
Still energized but need capital → Recapitalization
No viable buyers and limited value → Explore competitor interest before defaulting to wind-down
Preparing for Any Exit
Regardless of which path you choose, certain preparations improve every outcome:
Normalize your financials. Buyers want to see true operating performance. Strip out personal expenses, one-time costs, and owner perks so your EBITDA reflects what the next owner will actually earn.
Reduce owner dependency. Hire, train, and empower other providers to see patients independently. A practice that runs without you is worth more than one that can't.
Document your systems. SOPs for clinical protocols, billing, scheduling, hiring, and compliance. Documented businesses sell faster and for higher multiples.
Clean up legal and compliance. Resolve outstanding regulatory issues, tighten up employment contracts, and make sure your lease terms support a transition.
Start early. The best exits take 12 to 24 months of preparation. Rushed sales almost always leave money on the table.
You Don't Have to Figure This Out Alone
Choosing an exit strategy for a business you've spent years building is one of the most consequential financial decisions you'll make. A confidential conversation with an experienced M&A advisor can help you understand what your practice is actually worth, which buyers are active in your market, and which exit path fits your goals.
FAQs
Can I sell a solo physiotherapy practice?
Yes, but your options are more limited than a multi-location operation. Internal succession (selling to an associate) and selling to a local competitor are the most common paths. PE buyers typically require more scale, though your practice may qualify as a tuck-in to an existing platform.
How long should I expect to stay on after selling?
Transition periods range from 3 months to 3 years depending on the buyer type and deal structure. Owner-dependent practices require longer transitions. PE deals often include earn-outs tied to performance milestones that keep you involved for 1 to 3 years post-close.
What if I don't have an associate interested in buying?
Consider recruiting one with the explicit intent of succession planning, or explore external options like competitor sales or PE tuck-ins. An M&A advisor can identify qualified buyers you may not know are in your market.
Is a PE rollover worth the risk?
Rollovers can be highly lucrative. If the platform grows and exits successfully at a higher multiple, your rolled equity may generate more value than the initial cash payout. However, they carry real risk if the platform underperforms. Evaluate the operator's track record, portfolio strategy, and capitalization before committing.
How do I know what my practice is worth?
Start with your normalized EBITDA and apply a multiple based on your practice profile (2.5x to 4x SDE for solo practices, 4x to 9x EBITDA for multi-location operations). Market conditions, buyer demand, and your specific growth profile all influence where you land in that range. A professional valuation gives you a defensible number to negotiate from.
What is the difference between SDE and EBITDA?
SDE (seller's discretionary earnings) adds back the owner's salary and benefits to operating profit. It reflects the total economic benefit to a single owner-operator. EBITDA does not add back owner compensation and is typically used for larger, professionally managed practices. Solo practices are usually valued on SDE. Multi-location practices are valued on EBITDA.
When should I start planning my exit?
Ideally, 2 to 3 years before your target exit date. The first 12 to 18 months focus on preparation: cleaning up financials, reducing owner dependency, and documenting systems. The final 6 to 12 months are the active sale process.
Recommended Reading
How to Value Your Physical Therapy Clinic in 2026: EBITDA Multiples and Trends — The companion piece to this article. A deep dive into how physiotherapy practices are valued and what drives multiples up or down.
Should You Sell Your Business to Private Equity? — A thorough breakdown of how PE deals work, what buyers look for, and what to expect through the process.
Should I Sell My Company to My Employees? — Explores internal succession and employee buyout structures in detail.
Private Equity Rollovers: How to Sell Your Company Twice — How rolled equity works and when the "second bite" strategy makes sense.
How Poor Exit Planning Cost a Landscaping Owner $550,000 — A cautionary tale about what happens when owners skip preparation. The lessons apply directly to healthcare practice owners.
Key Takeaways
Your exit strategy should match your practice's profile, your financial goals, and your personal timeline. There is no one-size-fits-all answer.
Solo practices typically sell to associates or local competitors at 2.5x to 6x SDE/EBITDA, while multi-location operations can access PE platforms at 5x to 9x EBITDA.
Recapitalization offers partial liquidity while preserving your ability to participate in future growth. But only if you still have the energy to operate.
Every exit benefits from 12 to 24 months of preparation. Clean financials, reduced owner dependency, and documented systems are non-negotiable.
Wind-down should be a last resort. Even small practices often have more value than owners realize, particularly to competitors seeking patient relationships.
An experienced M&A advisor can help you identify the right buyers, run a competitive process, and negotiate terms that protect your interests.
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