How to Value Your Physical Therapy Clinic in 2026: EBITDA Multiples and Trends
If you own a physical therapy clinic generating $2M to $20M in revenue, you are sitting on an asset that has become increasingly attractive to buyers. Private equity firms have been rolling up PT practices for years, and 2026 is shaping up to be one of the most active markets yet.
But what is your clinic actually worth? And how do buyers arrive at that number?
This guide breaks down how to value your physical therapy clinic, what multiples buyers are paying, and what you can do now to position your practice for a premium exit.
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Why Physical Therapy Clinics Are in Demand
Physical therapy sits at the intersection of two powerful healthcare trends: an aging population and a shift toward outpatient, value-based care.
Medicare enrolment continues to grow, and post-acute rehabilitation is increasingly delivered in outpatient settings rather than hospitals. This creates a durable tailwind for PT clinics with strong referral networks and diversified payor mixes.
Private equity has taken notice. Platforms like ATI Physical Therapy, Upstream Rehabilitation, and US Physical Therapy have spent the past decade acquiring clinics to build regional and national footprints. These roll-up strategies rely on a steady pipeline of quality acquisitions, and that pipeline includes practices like yours.
According to PwC's 2025 healthcare M&A outlook, deal volume in provider services grew over 10% year-over-year, with outpatient rehabilitation being one of the most active sub-sectors.
How Buyers Value Physical Therapy Clinics
Most PT clinic valuations are based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization). EBITDA represents the cash flow available to a buyer after operating expenses but before financing and accounting adjustments.
According to WebPT's industry analysis, the average EBITDA multiple for physical therapy practices over the past five years has been 3.6x. However, multiples vary significantly based on practice size, owner dependency, and operational maturity. Smaller, owner-dependent clinics may see multiples as low as 2.5x to 3x, while well-established multi-location operations can reach 5x to 7x.
The key factors that determine where your practice falls on this spectrum include:
Scale: Multi-location practices command higher multiples than single-site clinics.
Owner dependency: Clinics where a significant portion of revenue is tied to the owner face substantial valuation discounts.
Growth trajectory: Clinics with consistent year-over-year growth are more attractive.
Payor mix: A diversified mix of commercial insurance, Medicare, and workers' compensation reduces risk.
Geographic footprint: Practices in high-growth markets or regions underserved by PT platforms attract premiums.
A single-location clinic with $500K in EBITDA and high owner dependency might sell for 3x to 4x, or $1.5M to $2M. A three-location practice with $1.5M in EBITDA, strong growth, and low owner dependency could command 5x to 6x, or $7.5M to $9M.
Source: Multiples based on Scope Research 2025 analysis and WebPT industry data.
Strategic buyers (typically larger healthcare systems or well-capitalized platforms) may pay a premium over financial buyers for practices that fill a geographic gap or accelerate their growth strategy. However, these premiums are increasingly reserved for practices with proven scalability and low owner dependency.
The Owner Dependency Problem: Why Many Clinics Sell for 3x or Less
One of the most significant, and often overlooked, factors in PT clinic valuations is owner dependency. If you are the primary treating therapist and generate more than 20 to 25% of your clinic's revenue, buyers will apply substantial discounts to your valuation.
Why? Because when you leave, a meaningful portion of the revenue may leave with you. Patients often have loyalty to their therapist, not the clinic. Buyers price this risk accordingly.
What this means in practice:
If you generate more than 20% of clinic revenue, expect buyers to require a multi-year retention agreement or earnout tied to patient retention and revenue maintenance.
If you generate more than 50% of revenue, your practice may be valued closer to 2.5x to 3.5x EBITDA, regardless of other factors.
According to Morgan and Westfield, earnouts are common in healthcare practice acquisitions due to "the sensitive nature of retaining clients and employees," with a substantial portion of the purchase price often contingent on retention metrics.
Retention and Earnout Structures:
Buyers typically structure deals for owner-dependent practices in one of two ways:
Earnouts: 20 to 40% of the purchase price is held back and paid over 1 to 3 years, contingent on the practice maintaining revenue levels or patient retention targets.
Employment agreements: The owner commits to a 2 to 5 year employment contract, with compensation structured to incentivize a successful transition.
The more dependent the practice is on you, the longer and more restrictive these arrangements become.
What Drives a Premium Valuation?
1. Recurring Revenue and Payor Diversification
Buyers want predictable cash flow. Clinics with a healthy mix of commercial insurance, Medicare, and cash-pay patients are less exposed to reimbursement cuts from any single payor.
2. Low Owner Dependency
If you are treating a majority of patients yourself, your practice is significantly harder to transfer, and buyers will discount accordingly. According to Scope Research, heavy reliance on the owner/operator leads to "employee retention and business continuity concerns" that compress multiples into the 3x to 4x range.
Building a team of licensed therapists who can operate independently is one of the highest-ROI moves you can make before selling. Aim to reduce your personal production to less than 20% of total clinic revenue.
3. Documented Processes and Systems
Clinics with standardized intake, scheduling, billing, and compliance workflows are easier to integrate. Buyers pay more for businesses that do not require a six-month rebuild after closing.
4. Clean Financials
Normalized EBITDA should exclude one-time expenses, owner perks, and personal expenses run through the business. If your books are messy, a buyer will assume the worst and discount accordingly.
5. Growth Trajectory
A practice growing at 10 to 15% annually is worth more than a flat practice with the same EBITDA. Buyers pay for momentum.
How to Calculate Your Clinic's Value
Start with your trailing twelve months (TTM) of EBITDA. Then apply a multiple based on your practice's profile.
Example 1: Owner-Dependent Single Location
Revenue: $800K
EBITDA: $150K
Owner produces 60% of revenue
Multiple: 3x (high owner dependency)
Estimated value: $450K
Deal structure: Likely 50% at close, 50% earnout over 2 years
Example 2: Multi-Location with Diversified Providers
Revenue: $3.5M
EBITDA: $700K
Owner produces less than 15% of revenue
Multiple: 4.5x (multi-location, moderate growth, low dependency)
Estimated value: $3.15M
If you reduce owner dependency and grow EBITDA to $900K with documented systems, you might command 5x to 5.5x, pushing the value to $4.5M to $5M.
Small improvements in margins and operations can have outsized effects on your exit price.
When to Sell Your Physical Therapy Clinic
Timing matters. The best time to sell is when your business is growing, your team is stable, and market conditions favor sellers.
2026 checks several of those boxes:
Interest rates are stabilizing, improving buyer financing conditions.
PE dry powder remains elevated, with healthcare as a favored sector.
Demographic tailwinds continue to support outpatient rehab demand.
If you are thinking about exiting in the next 12 to 24 months, now is the time to start preparing. Buyers will look at two to three years of financials, so any improvements you make today will show up in your valuation.
Preparing for a Successful Exit
Here are the steps to maximize your clinic's value before going to market:
Normalize your financials. Remove personal expenses, one-time costs, and non-recurring items.
Reduce owner dependency. Hire and train therapists who can treat your patient base without you.
Document your operations. Create SOPs for scheduling, billing, compliance, and patient intake.
Diversify your payor mix. Reduce reliance on any single insurance provider.
Invest in growth. Even modest revenue increases can meaningfully improve your multiple.
Engage an advisor early. An experienced M&A advisor can help you position the practice, run a competitive process, and negotiate terms.
Key Takeaways
The industry average EBITDA multiple for PT clinics is 3.6x, though this varies significantly based on practice profile.
Small, owner-dependent practices (under $1M revenue, owner producing majority of billings) typically sell for 2.5x to 3.5x EBITDA.
Multi-location practices with diversified providers can command 4.5x to 6x or higher.
If you produce more than 20% of clinic revenue, expect buyers to require multi-year retention agreements or earnouts.
Reducing owner dependency is the single highest-impact move you can make before selling.
Start preparing 12 to 24 months before your target exit to reduce owner dependency and maximize valuation.
Recommended Reading
Business Valuation Explained: How Buyers Value Your Company: A deeper dive into EBITDA normalization and valuation methods across industries.
Should You Sell Your Business to Private Equity?: Learn how PE deals work and whether a financial buyer is right for your practice.
How to Sell a Business in Canada: Step-by-Step Guide: If your clinic is north of the border, this guide covers the process from valuation to close.
Frequently Asked Questions (FAQs)
What is the average EBITDA multiple for a physical therapy clinic?
According to WebPT, the industry average EBITDA multiple over the past five years has been 3.6x. However, multiples range widely, from 2.5x to 3.5x for small, owner-dependent practices up to 6x to 8x for larger multi-site operations with professional management and minimal owner dependency.
How long does it take to sell a physical therapy clinic?
From preparation to closing, expect 6 to 12 months. Practices with clean financials and documented operations tend to close faster. Running a competitive process with multiple buyers can extend timelines but often results in better terms.
Do I need to stay on after selling my PT clinic?
Most buyers require some transition period. If you generate less than 20% of clinic revenue, expect a 6 to 12 month transition. If you are the primary producer, expect a 2 to 5 year employment agreement and/or a significant earnout tied to revenue retention. According to Morgan and Westfield, earnouts in healthcare practice sales are often "dependent on the retention of clients or employees."
Can I sell a single-location physical therapy clinic?
Yes, but valuations will be lower than multi-site practices. Single-location clinics often sell to individual buyers, small groups, or as tuck-ins to larger platforms.
What do buyers look for in a physical therapy practice?
Strong EBITDA margins, diversified payor mix, low owner dependency, documented systems, and a growth trajectory. Practices in underserved markets or with a specialty focus may attract additional premiums.
Recommended Reading
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