Specialty Physical Therapy Practice
This opportunity involves a high-performing outpatient physical therapy (PT) clinic with a niche focus on orthopedic rehabilitation, sports injury recovery, and post-operative care. Located in a suburban commercial corridor near several high-income residential neighborhoods, the clinic serves both privately insured and Medicare patients and has established itself as the go-to destination for orthopedic surgeons in the region to refer patients post-surgery. With trailing twelve-month revenue of $2.35 million and adjusted EBITDA of $475,000, the clinic employs 4 full-time DPTs (Doctors of Physical Therapy), 2 PTAs (Physical Therapy Assistants), and maintains a lean front office team that handles scheduling, verification, billing, and compliance.
This type of practice is highly attractive for acquisition due to its stable recurring referrals, licensed professional services, and efficient space utilization. However, the buyer must take into account provider licensing, reimbursement trends, clinician alignment, and physical facility limitations when evaluating the business. To properly structure a forward-looking, risk-adjusted acquisition strategy, each of these elements must be accounted for in the SBA 7(a) financing model and post-close operational blueprint.
Deal Structure Consideration
A likely SBA-compliant financing structure for this clinic would include:
Purchase Price: $1.85 million (3.89x EBITDA)
SBA 7(a) Loan: $1,387,500 (75%)
Buyer Equity Injection: $185,000 (10%)
Seller Financing: $277,500 (15%), with revenue continuity-based contingencies
The buyer must verify during diligence whether the state permits ownership by a non-licensed party. In most jurisdictions, ownership of the actual clinic entity can be held by a layperson, but clinical services must be delivered under the supervision of a licensed physical therapist. This opens the door for a management services organization (MSO) model, where the buyer contracts to provide back-office support (marketing, billing, HR, compliance) to the clinic in exchange for a management fee, while the clinical entity remains licensed to a DPT.
If the buyer is a licensed DPT, the acquisition is simplified and permits full equity ownership of the clinical entity. Regardless of structure, one of the most important parts of the deal is preserving the productivity of the four full-time providers and retaining the two PTAs who allow for higher patient volume per provider.
Staff Retention and Seller Note Protections
The seller is currently treating patients part-time (about 25 hours per week), with the balance of clinical volume handled by associates. The buyer should include a provision in the seller financing note that reduces the principal balance by 20% if more than 25% of licensed staff voluntarily leave within 120 days post-close. This protects the buyer from a key man risk scenario where associate clinicians, fearing change, exit and trigger revenue decline.
Additionally, pre-close employment agreements should be secured with all DPTs and PTAs, including retention bonuses paid in two tranches at 6 months and 12 months post-close tied to productivity and patient satisfaction benchmarks.
Revenue Mix and Reimbursement Analysis
The clinic’s payer mix is as follows:
Private Insurance (BCBS, Aetna, UHC): 57%
Medicare: 28%
Workers' Comp and Auto Claims: 9%
Cash Pay / Concierge Packages: 6%
The average reimbursement per visit is $96, with an average patient attending 9.2 visits per episode of care. Most patients are referred from local orthopedic groups, with which the clinic maintains strong relationships based on clinical outcomes, post-op protocols, and consistent communication. The buyer must preserve these referral channels post-close through in-person introductions, continued reporting on outcomes, and joint continuing education efforts with referring providers.
The billing system is integrated with the clinic’s EMR (WebPT), and the AR aging report shows 92% of balances collected within 60 days. A buyer should audit the billing process for any risk areas especially Medicare compliance, which can be a regulatory red flag if not properly documented and coded.
Facility and Lease Considerations
The clinic leases 3,800 square feet in a medical office plaza with ample parking and ADA-compliant facilities. Lease terms include 2 years remaining at $5,900/month gross, with a 5-year renewal option pre-negotiated. The space includes four private treatment rooms, a large open therapy area with machines and exercise equipment, a reception area, and a small administrative office. The buyer should evaluate the cost of equipment replacement, as some machines (treadmills, ergometers, electrical stimulation units) are approaching end-of-life and may require $30,000–$40,000 in upgrades within the next 18–24 months.
Operational and Growth Optimization Strategy
The seller has maintained a high-functioning operation with only minimal marketing. Referrals are nearly all physician-driven, and there is no outbound patient acquisition strategy in place.
The buyer can increase revenue and diversify lead flow by:
Launching a Direct-to-Consumer Campaign: Targeting local residents recovering from injury, surgery, or seeking performance enhancement. Facebook and Instagram ads can highlight dry needling, sports recovery packages, or postnatal rehab.
Creating Return-to-Activity Protocols: For common surgeries (ACL repair, rotator cuff, total knee replacement) that are co-branded with surgeons and distributed at local orthopedic practices to funnel patients to the clinic.
Expanding Services: Introducing cash-based services like massage therapy, stretching programs, performance conditioning, and injury prevention for youth athletes.
Utilizing Off-Peak Hours: The clinic is currently underutilized before 9am and after 5pm. Offering early morning or evening appointments could increase daily throughput and cater to working professionals.
Employer Wellness Partnerships: Targeting local businesses with on-site ergonomic assessments, injury screening days, and preferred provider status for workplace injuries.
Compliance, Insurance, and Regulatory Diligence
Physical therapy clinics are heavily regulated at both state and federal levels.
The buyer should ensure:
All DPTs and PTAs have current licenses in good standing
HIPAA compliance protocols (e.g., access logs, EMR security, breach notification procedures) are documented and current
Medicare billing is compliant with documentation standards and defensible under audit
Malpractice and general liability coverage is sufficient ($1M/$3M is standard)
The clinic has no history of adverse actions or audits, and has passed all prior Medicare reviews without sanctions. EHR documentation quality should be tested by reviewing at least 25 random charts for code appropriateness, documentation completeness, and outcome measure tracking.
Financial Diligence and Working Capital Requirements
Buyers should prepare for $60,000–$75,000 in working capital needs, including:
One month’s payroll (~$48,000)
2–3 weeks of accounts payable for supplies and landlord obligations
Immediate marketing campaign post-close ($5,000+)
Equipment refresh for aging capital items ($25,000–$40,000 if needed)
Inventory is minimal mostly linens, resistance bands, and electrodes which makes this an attractive low-CapEx service business. Revenue generation is tied directly to clinician productivity and proper scheduling density.
Ideal Buyer Profiles
This type of business is ideal for:
Licensed DPTs looking to transition from clinical work to ownership
Multi-clinic therapy groups seeking to expand regionally
Non-clinical investors backed by licensed clinicians or using MSO structures
What makes this acquisition particularly attractive is the alignment of high-quality care with predictable referral sources and clean financials. The clinic is not dependent on a single provider, maintains consistent EBITDA margins, and is located in a demographically favorable area.
Execution Priorities
The buyer should be prepared to:
Retain all clinical staff and confirm long-term licensing compliance
Lock in top referral sources through early introductions and continuity communications
Upgrade equipment as needed to modernize facility appearance
Implement scheduling efficiencies to boost daily visits per clinician
Launch a modest, targeted marketing campaign to supplement physician referrals
If properly structured and supported by a clinical leadership transition, this physical therapy practice offers stable recurring revenue, a clear roadmap for expansion, and a defensible EBITDA profile ideal for SBA-backed acquisition.
