Buying a Physical Therapy Practice
Why Searchers Target Physical Therapy
Physical therapy is recurring and demographic: an aging population, post-surgical rehab, and an active population getting injured feed a steady referral stream, and a course of care is many visits, not one. The category is deeply fragmented, tens of thousands of independent clinics, and actively consolidating, with PT-focused platforms and private equity buying groups, so exits are visible and sellers stay reasonable. Unlike medicine, dentistry, or optometry, most states do not bar non-therapist ownership, so the buyer pool is wider and a searcher can usually own the clinic outright with the clinicians as employees. The economics turn on reimbursement and on how much treatment runs through associate therapists, not the owner.
What Physical Therapy Practices Trade For
Physical therapy has no sold-price page of its own, and the publisher that keeps the sold data names physical therapists inside its medical practice class. Half of what sold there between 2021 and 2025 went for 1.46x to 2.94x SDE, on a 2.05x median, and 0.42x to 0.91x revenue. Asking prices on the same page run about a fifth higher at every quartile, which is the gap to hold in mind when a listing quotes a multiple at you. No EBITDA multiple is published at all, so a clinic-scale EBITDA figure is somebody's estimate rather than a sold number. Where a practice lands in the band is mostly the payer mix and owner dependence the next sections cover.
Payer Mix and Reimbursement
Reimbursement is the first thing that moves a physical therapy multiple. Read revenue by payer: Medicare, commercial insurance, workers' compensation, auto or personal-injury, and cash-pay each pay differently and carry different risk. Medicare is stable but rate-exposed, since its fee schedule has cut therapy payment in most recent years and the therapy-threshold review adds administrative drag. A clinic leaning heavily on any one payer, government or commercial, is one contract or rule change from a margin cut. Cash-pay and workers' compensation pay more per visit but are lumpier. Read the payer trend, not just the trailing number, and confirm the billing is clean, because a buyer inherits the documentation and any audit exposure.
Owner Dependence and Keeping Therapists
The second driver is how much of the treatment runs through the selling owner. A clinic where the owner personally generates most visits is buying that person a job; one where licensed associate therapists carry the caseload transfers cleanly and is worth more. Therapist supply is the operating constraint, because physical therapists are in structural shortage, so retention, compensation, and non-compete enforceability decide whether the caseload survives the sale. Referral concentration is the paired risk: a practice fed by one physician group or one hospital relationship can lose a third of its volume in a phone call. Verify the associate-therapist share of production and the spread of referral sources before crediting the multiple.
What to Verify in Diligence
The record to assemble before the offer holds:
- Revenue by payer, with Medicare share and the reimbursement trend
- The owner's personal production share against associate therapists
- Referral sources and concentration by physician or health system
- Therapist licenses, compensation, and non-compete enforceability
- Visits per episode of care and the overall visit-volume trend
- Billing and documentation quality, plus any payer audit history
- Equipment age and the real capex the clinic space needs
Financeability Notes
Physical therapy practices finance under SBA 7(a), and acquisition loans sit within searcher range, with recurring demand and light hard-asset needs that lenders read as steady cash flow rather than capital intensity. Expect underwriting to verify clinic and therapist licensure and to scrutinize payer mix, since a Medicare-heavy book carries a reimbursement risk a lender prices. If the seller is a producing therapist, model debt service on earnings net of a market salary for the associate who replaces that production, and net of the capex the equipment and space genuinely need. The margin risk to underwrite is a payer rate cut, so read the reimbursement trend, not just the trailing year.
Terms in This Industry
Cancellation and no-show rate
The share of booked visits that do not happen, on a schedule built weeks ahead.
Payer mix
The split of revenue across who pays, from Medicare to a patient's own pocket.
Visits per episode of care
How many visits a patient completes for one referral before they are discharged.
Units per visit
How many billable treatment units a visit produces, set by time and by what was done.
Provider agreement assignment
Whether a Medicare agreement passes to the buyer, which depends on what the seller is.
Plan of treatment certification
The certification a therapist's plan needs, on a ninety-day clock, and the referral that stands in.
Therapy assistant differential
Medicare pays fifteen percent less for a billed unit an assistant furnished more than a tenth of.
What the Data Says
Physical therapy has no benchmark page of its own, and the publisher places it inside its medical practice class in its own words. Practices sold in that class over five years to 2025 ran 1.46x SDE at the lower quartile, 2.05x median and 2.94x upper, with revenue at 0.42x to 0.91x. The class publishes no EBITDA multiple.
Source: Medical practice valuation benchmarks, sold listings (BizBuySell)
Asking and sold are published side by side on the same page, and the gap is the useful number: the class asks 1.78x SDE at the lower quartile against 1.46x sold, and 3.62x at the upper against 2.94x. A listing multiple in this class overstates the closing multiple by roughly a fifth at every quartile.
Source: Medical practice benchmarks, asking against sold (BizBuySell)
The loan program's own requirements tell a lender to consider the terms of the license a business operates under. From October 2026 they also require the lender to document that the ownership structure satisfies state law for a professional-license business, and keep that documentation in the file. Nothing in either version addresses payer mix, which is a lender's own concern rather than a program rule, so ask yours rather than assuming.
Source: SBA SOP 50 10, lender and development company loan programs
Enter earnings to apply this industry's cited band.
A sanity check against asking prices, not a valuation.
Lender context, from the SBA loan-level file: Live Oak Banking Company (9), The Huntington National Bank (6), Manufacturers and Traders Trust Company (6) wrote the most of this industry's 119 acquisition approvals. A bank that knows the trade says yes faster; the ranking for every industry is on Most Active Lenders by Industry.
Holding a live deal in this industry? Underwrite it with the comps, cited band, and charge-off rate pre-loaded.
Compare bands across industries in the cited multiple bands by industry.
Who Else Is Buying in This Industry
- U.S. Physical Therapy · Houston, Texas
Outpatient physical therapy practices bought in partial stakes rather than outright, several a year, leaving each selling owner a minority share and a continuing role in the clinic.
- Twelve-clinic physical therapy practice · 2026 · Sixty-seven percent equity interest, the owners keeping thirty-three; about 112,000 annual visits and $12 million of revenue.
- 1 more confirmed on the firm's profile
- H2 Health · Jacksonville, FL
A Jacksonville rehabilitation provider that buys outpatient physical therapy practices, including multi-clinic groups, and runs them inside a regional network.
- Advanced Physical Therapy · 2026 · Six outpatient physical therapy locations in the Little Rock, Arkansas market.
- Ivy Rehab · White Plains, New York
Independent outpatient physical therapy practices partnered into a national network one at a time, which is the buy-side a searcher bids against and the exit a practice owner already knows by name.
- Paul Wiener Physical Therapy · 2025 · Hackensack, New Jersey practice built over thirty-five years by its founding therapist.
- 2 more confirmed on the firm's profile
Buyers is the shelf these come from, ordered by who closed something most recently.
What It Costs to Replace the Owner
The multiples above are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. Hire someone instead and the going rate for the role comes back out. For this trade that is usually the administrator of a clinic or care facility, paid a median of $123,860 a year nationally. Subtract it from SDE before applying any multiple, because at a 3x multiple that wage also takes about $371,580 off what the business is worth to you.
Medical and health services managers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits. Every role, and the same arithmetic worked end to end, is in Manager Wages.
The Numbers That Run This Business
- Revenue share by payer, with Medicare exposure
- Associate-therapist production against the owner's
- Visits per episode of care and the visit-volume trend
- Referral concentration by physician or health system
- Therapist retention and open clinical positions