Long Island Pediatric Primary Care Practice, 19-Year Nassau County Anchor

$2.8M

Revenue

$784K

SDE

3.8x

Multiple

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Full Editorial Writeup

This is a 19-year-old pediatric primary care practice in Nassau County, New York, founded in 2007 by a pediatrician with more than three decades of clinical experience. The anchor practice runs out of a single 2,600 square foot office on a main commercial corridor, staffed by two full-time pediatricians and eleven support personnel, including an in-house billing department of three. It produces roughly $2.79M in trailing twelve-month revenue with $515,356 of Adjusted EBITDA (18.5% margin) and $784,481 of SDE.

What is actually for sale here is not a simple practice buyout. Ownership is seeking a capital partner to acquire roughly half the equity at a stated $3M enterprise value while the founding physician retains close to 50% and stays on to recruit additional practices into a regional pediatric group. The thesis is a consolidation play: the anchor already carries enhanced payor contracts built over decades of continuous contracting, so acquired practices migrate onto those higher reimbursement rates and lift collections on identical patient volume. That reimbursement arbitrage is the stated mechanism for funding the roll-up.

The pipeline is reportedly in motion, with two LOIs issued, four practices under NDA, and more than thirty independent practices identified. The seller's pitch is that a group led by a practicing Long Island pediatrician can reach solo and small-group sellers who have declined corporate acquirers, preserving clinical autonomy in a market that is overwhelmingly aging physicians with no succession plan. This is a platform-in-formation, not a passive cash flow buy, and the buyer is underwriting the founder's execution as much as the anchor's economics.

Why we like it

Earnings quality looks credible for a small practice: $515,356 Adjusted EBITDA on $2.79M revenue, add-backs verified transaction by transaction against the general ledger, net income tied to QuickBooks, and three years of corporate tax returns in the data room. Revenue held between $2.79M and $2.98M across the last four reporting periods, which signals a stable, non-lumpy base. That is a defensible foundation to underwrite before layering on any roll-up assumptions.
Pediatric primary care is about as recession-resistant as healthcare gets: kids need well visits, vaccines and sick care regardless of the economy, and a returning patient panel plus recurring payor reimbursement means the revenue does not have to be re-won each month. The enhanced payor contracts built over decades create a genuine moat because reimbursement rates are hard to replicate and travel with the platform. Migrating acquired practices onto those rates lifts collections on identical volume, which is a real economic edge, not a spreadsheet fantasy.
The market tailwind is concrete and local: Long Island pediatrics is dominated by solo and small-group physicians near the end of their careers with no succession plan, many of whom have declined corporate buyers. A group led by a practicing local pediatrician who preserves clinical autonomy can source deals a PE-branded acquirer cannot. With 32 practices identified and two LOIs already issued, the deal flow appears to exist rather than being aspirational.
Operator advantage is unusual and valuable: the founding physician retains close to 50%, stays on, and personally leads seller recruitment, so incentives are aligned and the person who built the payor relationships remains in the chair. The billing, credentialing, EMR (eClinicalWorks with integrated billing) and management infrastructure are already paid for, meaning the fixed cost of a platform is funded before the first bolt-on. A buyer is stepping into infrastructure that most single practices this size do not have.

How to improve it

Pressure-test and then execute the existing pipeline in the first 90 days: convert the two LOIs and the four NDA practices into signed deals with clean quality-of-earnings on each target. The entire thesis rests on the reimbursement uplift when acquired volume migrates to the enhanced contracts, so validate that uplift on one live acquisition before committing to a broader roll-up.
Centralize billing and credentialing onto the existing in-house team immediately as acquisitions close. The three-person billing department and office manager are already funded, so pushing acquired practices onto that shared function is where the margin expansion actually comes from. Track cost-per-claim and days-in-AR before and after migration to prove the operating leverage.
Add advanced practice providers (nurse practitioners and physician assistants) on the already-staffed cost base to expand patient throughput without adding another physician's salary. Pediatric primary care lends itself to APP-leveraged visits for well checks and routine sick care. This raises visits-per-location and improves EBITDA margin above the current 18.5%.
Turn on digital marketing, which the listing explicitly says is untouched. The anchor grows on reputation alone, so even basic local SEO, a modernized website, online scheduling and reviews management could grow patient panels at the anchor and each bolt-on cheaply. This is low-hanging organic growth layered on top of the acquisition strategy.
Build the value-based and quality-program infrastructure that only scale makes economic, as the seller notes. Once the group has enough covered lives, negotiate quality bonuses and value-based arrangements with the regional plans it already contracts with. This creates a second revenue stream on top of fee-for-service collections.
Lock down the lease and building relationship before closing. The building is held by the owner in a separate entity and is not part of the offering, so negotiate clear renewal terms and rent that reflect arm's-length market rates to avoid related-party leakage. Roughly 13 years remain, so codify escalators and options at closing.
Formalize the governance and equity structure given the seller retains close to 50%. Define control provisions, decision rights on acquisitions, and a clear buy-sell / exit mechanism so a 50/50 partnership does not deadlock as the platform scales. Get the founder to a defined recruitment and transition commitment in writing.

Diligence notes

Reconcile the three earnings figures: $2.79M revenue, $515,356 Adjusted EBITDA (18.5%), and $784,481 SDE. Understand exactly what add-backs bridge EBITDA to SDE and whether the two full-time pediatricians (including the owner) are compensated at true market rates, because a below-market physician salary would overstate normalized profit. Tie every add-back to the general ledger and the three years of tax returns as the seller claims is possible.
Scrutinize the enhanced payor contracts, since the entire roll-up thesis depends on them. Confirm the specific reimbursement rates, whether they are truly above-standard versus regional benchmarks, and critically whether those rates are transferable to acquired practices under the plans' terms. If plans can reprice or refuse to extend enhanced rates to new locations, the funding mechanism for the acquisition price collapses.
Verify the pipeline is real and not just a prospect list: get copies of the two LOIs and the four NDA engagements, confirm the economics and seller motivation on each, and assess how many of the 32 identified practices are genuinely gettable. A roll-up priced on a pipeline needs proof that at least the near-term deals will close at accretive multiples.
Examine the deal structure carefully because this is a 50/50 partnership, not a control acquisition. Confirm what $3M actually buys (roughly half the equity), how additional acquisition capital is sized and funded, and what governance, control and exit rights the investor receives. Model the dilution and cash needs of executing the pipeline, since the buyer must fund bolt-ons on top of the entry check.
Assess key-person risk on the founding physician, who is the source of the payor relationships, the recruitment engine, and clinical leadership. Understand the retention terms, non-compete, and what happens to the platform if the founder steps back or has a health event. The premium here is partly a bet on one person's ability to recruit sellers a corporate buyer cannot.
Confirm patient panel stability and the VFC vaccine program compliance, given pediatrics runs on returning families and government vaccine supply. Review payor mix (commercial vs Medicaid), no-show rates, and patient volume trends underlying the flat $2.79M to $2.98M revenue band. Also validate the related-party building lease terms so occupancy cost is arm's-length going forward.

Source

Originally listed on BizBuySell. View original listing →