Metropolitan Detroit Primary Care Practice, 2 Locations in Troy, MI

$2.0M

Revenue

$753K

SDE

2.5x

Multiple

Subscribe Free

Read the full deal writeup

Get Free Access

Already a member? Sign in

Full Editorial Writeup

This is a primary care medical practice operating out of two locations in the Metropolitan Detroit area, headquartered in Troy, MI (Oakland County). The practice runs 8 exam rooms across the sites and is staffed by 2 physicians, 3 nurse practitioners, and 5 support staff for a total of 10 full-time employees. It generates roughly $2.0M in annual revenue with $753k in reported EBITDA, a fat 38% margin that is characteristic of a well-run outpatient primary care operation with high provider utilization.

The payer mix leans heavily on government reimbursement: Medicare accounts for 50% of revenue, Medicaid 15%, other commercial insurance 28%, and self-pay just 7%. That mix tells you this is a bread-and-butter neighborhood practice serving an aging and lower-income population, not a concierge or elective cash-pay model. Management notes that the majority of patients have been seen for many years, which points to sticky, recurring relationships and a stable base of chronic-care revenue.

Equipment is modest and clinical: 2 EKGs, A1C and INR testing, and in-office swab processing at each location. Real estate is owned by the seller but not included in the $1.89M asking price (valued separately at $200k), and the deal transfers $15k of inventory plus $100k of FF&E. At 2.51x EBITDA, this is priced like a small owner-operator practice rather than a strategic platform, which is where the opportunity and the risk both live.

Why we like it

Earnings quality is strong for the size, with $753k of EBITDA on $2.0M of revenue for a 38% margin. Primary care with a long-tenured patient base produces predictable, recurring visit revenue rather than lumpy project income, and the 2.51x multiple means you recover capital fast if the earnings hold post-transition.
The moat is patient stickiness and payer relationships. The listing states the majority of patients have been seen for many years, and in primary care switching costs are real because patients stay with the provider who holds their history and manages their chronic conditions. That continuity is the single most defensible asset here.
Primary care is about as recession-proof as healthcare gets. Medicare and Medicaid patients (65% of revenue combined) keep coming regardless of the economy, and demand for chronic disease management in an aging Detroit-metro population only grows. This is boring, essential cash flow that does not blink in a downturn.
For an operator with a clinical partner or a physician buyer, the mid-level leverage is attractive. Three nurse practitioners handling volume under two physicians is an efficient staffing model that expands capacity without expensive physician salaries, giving you room to add patients without proportional cost growth.

How to improve it

Diversify the payer mix toward commercial insurance and self-pay. Medicare and Medicaid at 65% of revenue caps your reimbursement rates, so targeting a few higher-paying commercial contracts and modest cash-pay services (physicals, wellness, minor procedures) could lift the effective revenue per visit meaningfully.
Add ancillary revenue lines that fit the existing footprint. In-house labs, chronic care management (CCM) billing, remote patient monitoring, and annual wellness visits are all reimbursable programs that primary care practices routinely under-capture. Each one layers margin onto patients you already see.
Optimize provider scheduling and panel size. With 8 rooms and 5 clinical providers, measure current utilization and no-show rates, then tighten scheduling and add a few slots per provider per day. Even a 10% throughput gain on this cost base drops almost entirely to EBITDA.
Build a referral and retention engine. A practice reliant on long-tenured patients needs to replace attrition as older patients age out or pass away. Formalize referral relationships with local specialists and a simple recall/reactivation program to keep the panel full.
Evaluate a second-site or de novo expansion. The model already runs two locations, so the operating playbook is proven. Adding a third location in an underserved adjacent Detroit-metro zip code could replicate the economics without reinventing systems.
Negotiate the owned real estate into the deal or a fair lease. The seller owns the building but excludes it at $200k. Locking a long-term lease at market rent or acquiring the property protects you from a landlord who is also your seller and can be a favorable financing add-on.

Diligence notes

Scrutinize provider dependence and non-competes. Two physicians and three NPs generate all the revenue, so understand who the owner-physician is, how much production runs through them personally, and whether patients follow that individual. Confirm the departing owner signs a binding non-compete and stays for transition.
Pressure-test the Medicaid Estate Recovery note. The listing flags that MER started in Q4 2024, which can affect collections and patient behavior on the 15% Medicaid book. Get an explanation of the impact on realized revenue and any change in bad debt or patient mix since.
Verify EBITDA versus SDE and add-backs. EBITDA is disclosed at $753k but SDE is not, which matters because owner-physician compensation is likely a huge line item. Confirm whether the $753k is before or after paying a market-rate physician to replace the owner, since that single adjustment can swing the true earnings dramatically.
Confirm payer contracts and reimbursement stability. Request the actual contracts and reimbursement rates for Medicare, Medicaid, and the 28% commercial book, and check for any pending rate changes. Reimbursement-dependent practices live or die on these terms.
Review credentialing, licensing, and compliance history. Confirm all providers are properly credentialed with each payer, check for any malpractice claims, billing audits, or OIG issues, and validate that the MAPS program usage is fully compliant. Regulatory problems in healthcare can destroy value fast.
Analyze patient panel age and attrition. A base of long-tenured patients is a strength but also a risk if the panel skews elderly and is shrinking. Get age distribution, new-patient acquisition trends, and year-over-year visit counts to confirm the revenue is stable, not slowly declining.

Source

Originally listed on BizBuySell. View original listing →