Gastroenterology Practice with On-Site Endoscopy Lab, South Central Florida

$1.8M

Revenue

$979K

SDE

5.1x

Multiple

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Full Editorial Writeup

This is an established gastroenterology practice operating since 2013 in a growing South Central Florida market, notably the sole GI practice in its county. The practice serves roughly 6,000 to 8,000 active patients, carries a two-month appointment backlog, and generates $1.82M in revenue with $979K in cash flow. Its defining asset is an integrated office-based endoscopy lab (OBL), which lets the practice capture colonoscopy, EGD, and other diagnostic and therapeutic procedure revenue in-house rather than referring it out. That vertical integration is where the real margin lives in GI, and it is what separates this from a plain office practice.

The asking price of $5.0M includes the roughly 5,400-square-foot purpose-built medical/surgical facility valued at $1.75M, plus 35 to 40 parking spaces. Stripping out the real estate, the operating business is priced around $3.25M against $979K of cash flow, roughly 3.3x, which is reasonable for a single-provider specialty practice with procedural revenue. The seven-person staff (six full-time) is in place and the facility was designed specifically for GI and procedural care.

The obvious gate on this deal is physician succession. This is a single-provider practice tied to a retiring doctor, so the entire enterprise value depends on recruiting or being a gastroenterologist who can step in and retain referral relationships. For an incoming GI, a physician group, or an ASC/health-system consolidator, this is a turnkey platform with in-place demand, a captive OBL, and clear capacity upside from a physician who currently works only four days a week.

Why we like it

Earnings quality is strong for a solo practice: $979K cash flow on $1.82M revenue is a 54% margin, driven by the integrated OBL that keeps high-value colonoscopy and EGD procedure fees in-house instead of referring them out. GI is one of the more procedure-rich, cash-generative specialties, and the numbers reflect that.
The moat is unusually clean: this is the sole gastroenterology practice in its county with a two-month appointment backlog and 6,000 to 8,000 active patients. Being the only game in a growing rural market with entrenched referral relationships is a durable competitive position that is hard to replicate quickly.
GI services are firmly recession-resistant and demographically tailwinded. Screening colonoscopies, endoscopy, and management of GI and liver disease are covered medical care that older patients need regardless of the economy, and Florida's aging population keeps demand rising.
The revenue base recurs through a returning patient panel, referral pipeline, and recurring screening intervals (colonoscopies on multi-year recall cycles). Combined with the physician working only four days a week, there is real embedded capacity a motivated operator can unlock without buying new demand.

How to improve it

Restore the five-day clinical schedule immediately. The physician currently works four days with a two-month backlog, so adding a fifth day converts already-existing constrained demand into revenue without any marketing spend or new patient acquisition.
Maximize OBL utilization by scheduling more procedures through the existing endoscopy infrastructure. Procedure revenue carries the highest margin in GI, and the lab is already built and staffed, so incremental volume drops heavily to the bottom line.
Monetize the roughly 50% of the 5,400-square-foot building that is underused storage. Convert it to additional clinical or procedural rooms, or lease it to a complementary medical tenant to create a second income stream that de-risks the real estate carry.
Recruit a second provider or a physician assistant / nurse practitioner to extend clinical capacity beyond a single doctor. This reduces key-person risk, expands appointment slots, and lets the OBL run at higher throughput.
Audit and renegotiate payer contracts and confirm reimbursement rates for the highest-volume CPT codes. Solo practices routinely leave rate increases on the table, and even modest fee-schedule improvements compound directly into cash flow.
Build a systematic screening recall and reminder program so patients due for repeat colonoscopies are automatically re-engaged. This locks in the recurring, calendar-driven nature of GI screening and smooths future procedure volume.
Formalize and diversify referral sources beyond the retiring physician's personal relationships. Establish institutional referral agreements with primary care groups so the pipeline survives the ownership transition.

Diligence notes

This deal lives or dies on physician succession. Confirm whether the buyer is an incoming gastroenterologist or must recruit one, and quantify how much of current revenue and referrals is personally tied to the retiring doctor versus the practice brand and location.
Verify the payer mix and reimbursement exposure. Understand the split between Medicare, commercial, and any managed-care contracts, since GI reimbursement and colonoscopy screening rules directly drive the durability of that $979K cash flow.
Scrutinize the OBL's regulatory standing, accreditation, and facility-fee billing. Confirm the endoscopy lab is properly licensed and that its procedure billing (facility plus professional components) will transfer cleanly to a new owner without CMS or state re-credentialing gaps.
Independently value the real estate. The $1.75M building is roughly a third of the asking price, so obtain an appraisal and confirm the operating-business multiple net of real estate (~3.3x) is what you are actually paying for the practice.
Confirm SBA pre-qualification terms and how the real estate factors into financing. A 7(a) or 504 structure changes the equity check materially, so validate lender appetite given the single-provider key-person risk.
Review staff retention and credentials for the 7 employees, especially any procedural/endoscopy techs. Losing trained OBL staff during transition would directly throttle the highest-margin revenue line.

Source

Originally listed on BizBuySell. View original listing →