Multi-Location Therapy Practice, Denver Metro

$4.2M

Revenue

$756K

SDE

6.0x

Multiple

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Full Editorial Writeup

This is a multi-location therapy services practice operating in the Denver metro area, structured so that a non-licensed owner can hold and run it. That single fact matters more than it sounds: it means the clinical work is delegated to licensed providers and the owner's role is management and growth rather than treating patients, which widens the buyer pool considerably. The business generates roughly $4.17M in annual revenue and about $756K in cash flow, a healthy 18 percent owner-earnings margin for a services practice.

The practice runs on recurring patient volume, diversified insurance contracts, and established referral relationships with local physicians and other providers. Referral-driven, insurance-reimbursed therapy is about as sticky as healthcare services get: patients come in on multi-visit treatment plans, and the referral network keeps the top of the funnel full without constant marketing spend. An experienced leadership team is already in place, and the listing describes limited owner involvement, which points to a genuine management layer rather than an owner-dependent operation.

At a $4.5M ask on $756K of cash flow, this prices at roughly 5.95x, which is at the higher end for a therapy practice but defensible given the multi-location footprint, absentee structure, and the SBA prequalification. The story here is a durable, boring, recession-resistant cash flow that an operator can buy with 10 percent down and grow by adding providers, specialties, and locations.

Why we like it

Earnings quality is strong for a services business: roughly $756K of cash flow on $4.17M of revenue is an 18 percent margin, and the income is reimbursed through diversified insurance contracts rather than concentrated in a few private-pay clients. Insurance-backed, referral-fed revenue tends to be predictable month to month, which is exactly what you want when servicing acquisition debt.
The moat is the referral network plus the insurance contract book. Physician and provider referral relationships take years to build and do not follow the seller out the door if the clinical team stays, and in-network status with multiple payers is a real barrier that new entrants have to grind for. Multi-location presence adds geographic density that compounds referral flow.
Therapy is genuinely recession-resistant. Physical, occupational, and speech therapy are medically necessary, largely insurance-funded, and often physician-prescribed, so demand holds up when discretionary spending gets cut. This is the kind of boring, essential cash flow that keeps paying through a downturn.
The operator advantage here is the non-licensed ownership structure and existing leadership team. You do not need a clinical license to own it, and there is already a management layer running day to day, so a capable operator can focus on adding providers, opening locations, and layering in higher-margin specialty services rather than being trapped in the treatment room.

How to improve it

Audit provider productivity and capacity in the first 90 days. Therapy economics are driven by visits per provider per day and payer mix, so identify underutilized clinicians and open scheduling slots you can fill immediately without adding headcount. Small gains in visit density flow almost entirely to the bottom line.
Renegotiate or expand payer contracts and scrub the fee schedules. Diversified insurance contracts are an asset, but reimbursement rates vary widely by payer, and stale contracts often sit below market. Push for rate increases on high-volume codes and add any commercial payers you are not yet in-network with to broaden the referral funnel.
Tighten revenue cycle and reduce claim denials. In insurance-reimbursed therapy, a few points of denial or slow collections quietly erode margin. Bring in clean documentation standards, faster claim submission, and denial follow-up to convert already-earned visits into collected cash.
Add specialty service lines that use the existing footprint. Pelvic health, hand therapy, sports rehab, or vestibular therapy can be layered onto current locations to raise revenue per patient and per square foot. These specialties often command better reimbursement and deepen referral relationships with specialist physicians.
Build a systematic referral development function. Right now referrals appear to come from established relationships, but formalizing physician outreach, tracking referral sources, and closing the loop with referring providers turns an informal network into a repeatable growth machine that survives any single relationship.
Evaluate a second or third location as a de novo or tuck-in. The absentee, management-run model is built to scale, so use the existing back office, billing, and leadership team to expand market reach. Adding sites spreads fixed overhead and increases enterprise value at exit.
Standardize operations across locations to protect the absentee structure. Document scheduling, intake, billing, and clinical compliance into playbooks so quality and margin do not drift as you add providers and sites. This is what keeps the business genuinely manager-run instead of quietly owner-dependent.

Diligence notes

Verify the payer mix and reimbursement trends in detail. Pull the breakdown of revenue by insurer, the percentage from Medicare/Medicaid versus commercial, and the direction of reimbursement rates over the last three years. Therapy reimbursement has faced ongoing pressure, so understand rate risk before underwriting the cash flow.
Confirm the true level of owner involvement and the strength of the leadership team. The listing claims limited owner involvement, so document exactly what the seller does, whether a clinical director and administrator are in place, and whether they are staying. If the owner is quietly the top referral source or key clinician, the absentee claim is overstated.
Assess provider retention and dependency. Therapy revenue walks out the door with the therapists, so review employment agreements, non-competes, tenure, compensation, and any turnover history. A handful of high-producing clinicians leaving post-close could materially dent the $756K cash flow.
Scrutinize referral source concentration and stability. Ask for referrals by source and confirm no single physician or clinic drives an outsized share of volume. Referral relationships are the moat, but concentration in one or two referrers is a real risk that could reverse quickly.
Validate the cash flow definition and normalize add-backs. Confirm what is included in the $756K figure, how owner compensation is treated, and whether one-time or personal expenses were added back. Also verify the SBA prequalification terms, the seller financing structure, and whether the 10 percent down scenario is realistic for your buyer profile.
Review compliance, credentialing, and billing integrity. Confirm all providers are properly licensed and credentialed with each payer, that documentation supports billed codes, and that there are no open audits or recoupment exposure. In insurance-reimbursed healthcare, a billing compliance issue can create real successor liability.

Source

Originally listed on BusinessBroker.net. View original listing →