Sell My Medical Practice to Private Equity: The Honest Playbook

By Pedro Rojas, Managing Partner  ·  May 2025  ·  ~6 min read

Every doctor I meet who is thinking about selling has heard the same pitch. A friend got a call. A consolidator in their specialty is paying “10x.” The number is real, the friend is real, the deal almost never looks like what they think it looks like.

If you’re searching “sell my medical practice to private equity,” you’re already further along than most. You also need to know what the headline number actually buys you — and what it costs.

Here is the deal, framed the way an operator would frame it.

What Private Equity Actually Wants

Private equity does not buy medical practices the way another doctor buys a practice. A peer buyer wants your patient panel and your lifestyle. A PE buyer wants a platform — a clinical asset they can grow, layer add-ons onto, and resell to a larger fund in three to seven years.

That distinction drives every term in your LOI.

They are underwriting three things:

• Predictable EBITDA — clean, defensible earnings after a fair physician compensation add-back
• A growth story — referral engine, payer mix, scalable operations, room for add-on acquisitions
• A reason you cannot walk away on day one — through rollover equity, earnouts, or a multi-year employment agreement

If any of the three is missing, the deal either doesn’t happen or the multiple compresses fast.

The Three Deal Types You’ll Be Offered

PE in healthcare moves in three patterns. Knowing which one you’re in tells you what to fight for at the LOI.

Platform Deal — You Are the Anchor

A fund is entering your specialty or geography and wants you as the founding asset. EBITDA usually $3M+. You sign on as Chief Medical Officer or regional lead. Multiples are the highest in the market because you carry the brand the fund will roll up against.

The tradeoff: the longest hold, the largest rollover, and the most operational involvement post-close.

Add-On Deal — You Are Joining a Platform

A fund already owns the platform in your specialty. You’re bolting onto an existing MSO. EBITDA typically $1M–$5M. The process is faster, the diligence narrower, the multiple lower than a platform but often higher than a peer sale.

The tradeoff: you inherit their systems, their EHR, their billing, their compensation grid. Some of that is good. Some of it is a culture shock you should price into the deal.

Tuck-In — You Are Filling a Map

Sub-$1M EBITDA, often a single location, often acquired to plug a geographic hole or pick up a payer contract. Multiples track closer to traditional brokerage ranges. Diligence is light, close is fast.

The tradeoff: you are the smallest entity in the org chart on day one. Treat the offer as a peer-sale offer with PE branding on it.

How the Money Actually Comes to You

The single most misunderstood part of a PE deal is the headline number. A doctor hears “$10M” and pictures a wire. The wire is usually 60–75% of that. The rest is structured.

A representative platform-sized deal on $2M of adjusted EBITDA at a 7x multiple looks like:

The cash at close is yours. The rollover and earnout are bets — on the platform’s next exit, and on your ability to hit operating targets while integrating.

Multiples — What PE Actually Pays in Healthcare

Multiples vary by specialty, payer mix, and platform status, but the bands are tighter than brokers admit.

Anything above those bands usually involves a heavier rollover, a longer earnout, or a strategic buyer paying for something specific — a payer contract, a piece of geography, a clinical capability. If a buyer is quoting you outside this range with no structure to back it up, that’s the conversation to slow down, not speed up.

What Makes a Practice Premium-Priced to PE

Most practices come to market un-ready for the buyer they want. The fixable gaps that move you a full turn or more on the multiple:

• Owner-independence. If the practice cannot run for a week without you, you are not selling a business. You are selling a job.
• Clean financials, accrual-basis, three years deep. Cash-basis QuickBooks costs you a multiple. Every time.
• Documented payer mix and contract terms. A buyer modeling commercial vs. Medicare exposure needs this in week one of diligence.
• A growth narrative that isn’t just “more of me.” Add-on locations, new service lines, value-based care contracts, a referral engine you don’t personally run.
• A management layer. A practice manager who actually manages. A clinical lead who is not the seller.

The work to install these takes 12–24 months. Practices that start before they list capture the premium. Practices that list first and try to fix in diligence lose the premium.

The Red Flags in a PE Offer

Not every PE offer is a real offer. Some are anchor offers — high LOI, low close. Some are option deals dressed up as acquisitions. Watch for:

• No proof of funds, no recent close in your specialty. A fund that has never done a deal like yours will use your diligence to learn.
• Open-ended working capital adjustments. This is where money quietly leaves the cash-at-close column.
• Earnout tied to metrics you don’t control post-close. If the buyer sets the staffing, the EHR, and the comp grid, your earnout is their decision, not yours.
• A rollover with no liquidity event defined. “Rollover into the MSO” with no clarity on hold period or exit path is a long-dated IOU.
• Aggressive non-competes that survive a failed earnout. Read the post-close terms before you read the headline.

A real PE buyer will not flinch when you push on any of these. A buyer who flinches told you what kind of buyer they are.

Should You Sell to PE — Or to a Peer?

PE is not better than a peer sale. It is different.

• Sell to a peer if you want certainty of close, a clean break, and a buyer who cares about the patient panel.
• Sell to PE if you want a premium multiple, a second bite at a larger exit, and you’re willing to stay engaged 2–5 years post-close.

The wrong answer is selling to a PE buyer with a peer-sale mindset. The seller leaves money on the table on day one and resents the rollover by year two. The right answer comes out of structuring the process so multiple buyer types compete — and you pick the one whose terms fit the life you want after close.

That is what a sell-side process does. That is what one phone call from a single consolidator does not.