By Luis de la Prida, MBA, CM&AA

As explored in this series, selling a physical therapy center is a multi-step process. It’s important to understand each step.

That’s because each step in the process may result in negotiations. For example, a seller may receive an offer in the earliest stages that is reduced during the due diligence phase. The seller may go with a higher offer, without recognizing that it may be subject to an earnout at later stages.

In addition, practice owners sometimes fail to realize that it could take between 6 and 18 months to sell a practice, depending on its size and other conditions. By understanding the stages, clinic owners can better prepare themselves for what lies ahead; namely, trying to run a practice while at the same time trying to confidentially sell it. It’s also key to know at what point a seller will work with different advisors, because there is a cost associated with these advisors.

Here are a few key steps in the M&A process.


Now is the time to figure out an exit strategy and determine how much the clinic is worth. Once that is known, it is possible to enhance the value of a practice before going to market. One year before selling, consider: identify and fill management gaps, review staffing needs, and improve operations.

Data Gathering

The goal of this phase is to work with an advisory team to recast financials. Starting with tax returns, make the following adjustments: one-time items, owner expenses, interest, and depreciation. Next, create a pitch book to sellers, including: an executive summary, market overview, company overview, ownership structure, employees, locations, legal/regulatory, and due diligence.


Buyers must know the practice is for sale. Consider the types of outreach options: email, direct mail, telemarketing, or a proprietary buyer database. The goal is to find qualified buyers and ask them to sign non-disclosure agreements.


Assuming the chosen marketing efforts are successful, several offers have probably been presented. Now is the time to engage with multiple buyers. Ask each buyer about how they would structure a possible transaction, financing, and employment contracts.

Due Diligence

This phase begins once an offer is accepted. The buyer will review the practice’s accounting, legal, technology, and operational systems. Remember: What’s uncovered during the due diligence phase may cause a buyer to decrease the offer. So act quickly, but carefully—time kills deals.


At this point, work closely with an attorney to review the purchasing and employment agreement. The seller is responsible for facilitating the closing process, post-closing integration, and post-closing reconciliation.

Luis de la Prida, MBA, CM&AA, is a partner at New York Business Brokerage Inc, an M+A advisory firm that specializes in small to mid-market companies. For more information, contact [email protected].