Over the summer, I was invited to participate at Deloitte’s Entrepreneur summit in Texas. It was so cool to meet and talk with over 400+ of the most innovative entrepreneurs and private equity firms in the world.
One thing that really stood out was the discussion around high interest rates. They're shaking things up, particularly for those looking to sell their clinics. Bain Company's forecast? A staggering 41% drop in global deal values for 2023 compared to 2022. This is big news for clinic owners like us.
What this means is buyers are treading more carefully than ever. If you're considering selling your clinic, it's vital to make sure every aspect is on point to secure the best deal and the payoff you deserve.
In this blog, you’ll learn the five different buyers who are making big moves and buying clinics strategically in 2024. As the market shifts, understanding these acquisitions is not just interesting but crucial for clinic owners who want to get the highest value they can.
1. Independent Allied Health Clinics
A trend is emerging within independent allied health clinics. Physical therapy clinics are taking bold strides by acquiring others in their niche. What's catching our attention is the accelerated pace at which these clinics are broadening their scope. Physical therapy clinics are not just acquiring other physical therapy clinics; now they're expanding their offerings by purchasing chiropractic clinics, cornering the market by providing a one stop shop within their network of clinics.
On the other hand, chiropractic clinics are also joining the acquisition game, augmenting their services by integrating physiotherapy. This reciprocal trend is reshaping the healthcare landscape, blurring traditional boundaries between specialized clinics and fostering a more holistic approach to patient care.
Larger healthcare groups are emerging as dominant players, owning and operating clusters of clinics in local areas. The trend towards consolidation is obvious, with these groups acquiring five to ten clinics and effectively rolling up their competitors. This shift not only reflects a change in ownership dynamics but also underscores the growing influence of comprehensive, multi-disciplinary healthcare providers in 2024.
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2. Physical Therapy Corporates
A significant player taking center stage on the clinic acquisition landscape is the physical therapy corporates. Entities like CBI, boasting a portfolio of 250+ clinics, have made big waves. What sets them apart is their association with OMERS, Ontario's largest pension fund, adding a financial weight to their strategic moves.
Then there's Lifemark with over 300 clinics, backed by the colossal Loblaws, a $37 billion grocery chain that already holds the reins of the largest pharmacy chain. This conglomerate approach signals a convergence of healthcare with major retail players, changing the dynamics of clinic ownership and patient care.
If we look south to the U.S., giants like USPH, Athletico, and ATI are playing a similar game, acquiring numerous clinics across the country. It's a trend where corporate entities are stitching together a network of clinics under their umbrella, aiming for widespread influence and a holistic approach to physical therapy services.
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3. Strategic Corporates
Now, let's talk about the next big players, strategic corporations. Loblaws, a massive $37 billion grocery chain, isn't just about groceries anymore – they've dipped their toes into clinics too. Now they’re blending grocery shopping with healthcare. Who would’ve thought?
Then there's Well Health, a tech giant. Yes, they're usually all about software, but guess what? They're also adding clinics to their mix. Now technology meets hands-on healthcare.
These aren't your typical healthcare companies; they're Strategic Corporates making strategic moves. They're from different worlds, like groceries and software, but they want a piece of the healthcare scene.
PS. Here’s the #1 mistake you need to avoid when selling your clinic.
4. Public Traded Companies
Let's talk about the big guys buying clinics in 2024, especially those you can find on the stock market. USPH, Joint PT, and ATI are some of the heavy hitters making moves.
Now, here's their trick – they're valued at a certain price to earnings ratio (P/E). For example, right now USPH has a price to earnings ratio of 51.47.
And right now Joint PT has a price to earnings ratio of 48.89.
Why does this matter? Well, if these companies are seeing a 51x or 48x price to earnings ratio, then it’s a no-brainer for them to buy your clinic at a 5x multiple. They make their money on the spread. It's a smart game they're playing.
Let’s move onto the final buyer acquiring clinics in 2024…
If you’re thinking of selling, then you need to watch this recording webclass about, The Blueprint For Selling Your Clinic For The Maximum Value Possible That We Discovered From Selling 127 Physical Therapy & Chiropractic Clinics. Click here to watch it instantly.
5. Financial Buyers
Let's talk about the money players in clinic buying - the Financial Buyers. These are basically big-money companies, like The Beekman Group, that own a bunch of clinics.
They own Twin Boro Physical Therapy Associates, showing how they're using their financial muscle in the physical therapy world. Check them out here.
Now, switch gears to dentistry. Peloton Capital Management is another big-money player, and they're behind 123Dentist, the biggest dental chain in Canada. See what they're up to here.
These Financial Buyers are the big bosses with a lot of money, who want a piece of the physical therapy clinic pie.
How much does the clinic owner treat? This is a major factor in what buyers look for when acquiring your practice. Learn more in this instagram post.
Do This Next: Find Out the Value of Your Clinic
Is now the best opportunity for you to sell your physiotherapy or chiropractic clinic? Should you sell this year? Should you wait five years? Or are you on the flip side and looking to expand by buying more clinics?
There are many reasons why clinic owners want to sell.
If you want to sell a physiotherapy or chiropractic practice now or in the future, you will need to know how to determine an accurate valuation for your practice. If you’re looking to buy, you’ll need the same set of skills to assess how much the one you want to acquire is really worth. Get a free clinic valuation and get help to sell with Clinic Accelerator. We have access to over 22K+ owners & 30+ years experience in M&A
To get a free customized valuation of your clinic, CLICK HERE.
If you're not quite ready to sell but aim to enhance your clinic's value for the future, explore these 7 strategies to boost its overall worth. Check out the article here to discover ways to increase the value of your clinic.
Or, if you’re looking to buy a clinic, click here to check out our clinics listed for sale.
1. Who is buying clinics right now in 2024?
The 5 buyers we are seeing acquiring clinics are independent allied health clinics, physical therapy corporates, strategic corporates, public traded companies and financial buyers.
2. What should I do before trying to sell my clinic?
Before selling your clinic, take these steps: first, determine its value using EBITDA. Next, ensure it's attractive to potential buyers by evaluating your systems, staff, and revenue. Once prepared, start the search for qualified buyers.
3. How much can I sell my clinic for?
To figure out how much your clinic can be sold for, focus on EBITDA – earnings before interest, taxes, depreciation, and amortization. Seek help from a business accountant or clinic sales specialist to calculate your EBITDA. Once determined, agree with the buyer on a multiple, multiply it by the EBITDA, and you've got your sales price.
Who is Rick Lau and CallHero?
Rick has built three 10 million dollar healthcare businesses over the past 15 years including a network of 127 clinics with over 1400 employees. He is one of the most sought-after mentors for clinic owners in Canada and USA where he helps owners double, triple, and even quadruple their profits by optimizing their clinic operations using his proven systems and leadership strategies. Plus, he has spent over millions in google and facebook ads during his career.
You can follow him on Instagram