What Your Practice Is Actually Worth — The Multiples Reality

Every broker you talk to will dangle the highest possible multiple in front of you. It’s how they win the listing. But the truth is that multiples vary dramatically based on the size of your practice, its structure, and the buyer pool available to you. If you go to market with unrealistic expectations, you’ll waste months, burn out your team, and potentially leave real money on the table.

So let’s get honest about what the market actually looks like.

The Three Tiers of Medical Practice Transactions

Where your practice falls in these tiers determines your realistic valuation range, the types of buyers available to you, and how competitive the process will be. The buyer landscape is broader than most owners realize — it includes strategic acquirers, independent sponsors, family offices, search funds, venture capital firms, private equity groups, and management companies.

Understanding Each Tier

Tier 1: The Small Practice (1–3 Providers)

If you’re running a small practice with one to three providers and EBITDA between five hundred thousand and one and a half million, you’re in Tier 1. This is the most common transaction in the market. Most buyers will pay three to five times EBITDA. Can you get higher? Occasionally. But fewer than ten percent of buyers will go above that range, and it almost always requires a very specific strategic fit.

Important: even solo practitioner practices are sellable at this tier. You won’t command a premium without a transition plan, but with the right structure — where the owner stays on to help transfer relationships and operations — these practices sell at market value every day.

Tier 2: The Mid-Size Group (3–8 Providers)

Tier 2 is where things get more interesting. At this level, you start seeing meaningful buyer competition from strategic operators, independent sponsors, family offices, and search funds — not just private equity. Typical multiples land between four and six times, with premiums reaching six to eight times for practices with clean books and value-based care contracts.

Tier 3: The Large Platform (8+ Providers)

Tier 3 is the big league. These deals need a special buyer, but the upside is transformational. Standard multiples are five to seven times, and the right strategic acquirer might pay eight to twelve times. At this level, the second bite on your rolled equity can be worth as much as the initial sale.

The Hidden Gold Mine: Equity Rollover

Don’t sleep on equity rollover. Say you sell a one and a half million EBITDA practice at three times. That’s four and a half million. You take three million in cash, roll one and a half into the platform. Three to five years later, your rolled equity could be worth four to five million. Total payday on a “modest” three-times deal: seven to eight million dollars.

Know your number. Know your tier. Then let a competitive process do the rest.