Established Pediatric Practice, 30-Year Riverside County CA

$1.9M

Revenue

$1.2M

SDE

3.6x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a long-established pediatric medical practice in Riverside County, serving families across Southern California's Inland Empire for roughly three decades. The practice collects approximately $1.9M to $2.0M annually and has produced a three-year average SDE of around $1.22M, which is exceptional operating leverage for a single-provider primary care practice. It runs turnkey with a Physician Assistant, office manager, medical assistants, and administrative staff, plus established EMR, payer relationships, and referral networks.

What makes this deal notable is the combination of maturity and slack capacity. The current physician works a limited clinical schedule of roughly 20 hours per week, meaning the practice is generating $1.2M+ SDE on part-time provider hours. That leaves obvious runway to add provider hours, hire mid-levels, or extend clinic times against an existing patient panel and referral base without needing to re-acquire demand.

The medical office building is offered separately at $2,495,000 and is not part of the $4.39M operating asking price. The building spans roughly 5,000 square feet with the practice occupying about 4,200 square feet and an on-site pharmacy tenant paying rent, giving a buyer optionality on owner-occupancy versus leaseback. At 3.62x cash flow for the operations alone, this is priced above typical single-provider primary care comps, which the seller is likely justifying with the profitability and staff continuity.

Why we like it

Earnings quality is strong for a healthcare services deal: $1.21M SDE on $1.89M in collections is a 64 percent margin, and the three-year SDE average of $1.22M shows the profitability is consistent, not a one-year spike. Managed care contracts and a recurring patient panel make the revenue predictable rather than project-based.
The moat is real for primary care: 30-plus years of goodwill, an established referral network, and long-standing managed care relationships that a new entrant would need years to replicate. Pediatric patients build multi-year relationships with a practice, so the panel is sticky and switching costs are meaningful for families.
Market tailwinds are favorable in the Inland Empire, one of California's fastest-growing regions with continued residential development and a young-family demographic. Pediatric demand tracks births and household formation, both of which the growth of this market supports.
The operator advantage is the biggest hook: the physician is only clinical 20 hours per week, so $1.2M SDE is coming off part-time provider capacity. A buyer who adds a second provider or extends hours can materially grow earnings against an already-warm patient base without buying new demand.

How to improve it

Add provider capacity first. The current physician works roughly 20 hours a week, so bringing on a nurse practitioner or additional physician and extending clinic hours directly monetizes the existing panel and referral flow. This is the single clearest lever to grow SDE.
Audit and renegotiate managed care contracts. Reimbursement rates on pediatric visits vary widely by payer, and a 30-year practice may be sitting on legacy rates. Re-credentialing to better networks or renegotiating fee schedules can lift revenue per visit with no added volume.
Add ancillary and preventive services. Well-child visit compliance programs, developmental screenings, vaccinations, lactation support, and lab draw services can raise revenue per patient. Each is low-capex and leverages the same exam-room footprint and staff.
Improve patient scheduling density. With 14 exam rooms and part-time provider hours, the physical plant is underutilized. Tighter scheduling, same-day sick visits, and reduced no-show rates through reminders can meaningfully increase billable encounters per provider hour.
Formalize recall and preventive care outreach. A structured system to bring patients back for annual well-child visits and vaccinations turns a passive panel into a predictable revenue engine. This also improves quality metrics that drive value-based payer bonuses.
Evaluate the real estate purchase carefully as a separate decision. Buying the building at $2,495,000 with a rent-paying pharmacy tenant can lock occupancy and add rental income, but it should be underwritten on its own cap rate, not bundled emotionally with the practice.

Diligence notes

Verify SDE add-backs and the physician's replacement compensation. Since the owner works only 20 hours per week, confirm what it costs to replace their clinical output. If the buyer needs a full-time physician plus a manager, true post-acquisition cash flow could be lower than the stated $1.21M.
Confirm payer mix and reimbursement stability. Pull the breakdown of commercial versus Medi-Cal patients, since California pediatric practices often carry heavy Medicaid exposure with thin reimbursement. Understand concentration in any single managed care organization and contract renewal terms.
Assess key-person and staff retention risk. The Physician Assistant and experienced team are described as central to operations, so confirm employment agreements, non-competes where enforceable, and whether the PA intends to stay. Loss of the PA in a part-time-owner model could break the economics.
Reconcile the numbers: title says $1.2M SDE while the listing cites a three-year average of $1.224M and EBITDA of $728,000. Get audited or accountant-reviewed financials for three years of collections, and understand why EBITDA is so much lower than SDE.
Understand physician licensing and continuity of care requirements. A buyer without a medical license in California may need a physician owner or a management services organization structure to comply with corporate practice of medicine rules. Clarify the legal structure required to close.
Diligence the real estate separately. If purchasing the building at $2,495,000, verify the pharmacy tenant's lease terms, remaining term, and rent, and get an independent appraisal. Confirm the practice's own lease rate if the buyer opts to lease rather than buy.

Source

Originally listed on BizBuySell. View original listing →