Long-Established Ophthalmology Practice, Metro Atlanta

$1.3M

Revenue

$753K

SDE

1.9x

Multiple

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Full Editorial Writeup

This is a long-established ophthalmology practice in Metro Atlanta providing comprehensive medical and surgical eye care. Ophthalmology sits at the top of the eye-care value chain: these are MDs who diagnose and treat eye disease, perform surgery (cataract, glaucoma, retinal work), and handle both routine and complex vision care. The practice generates $1.34M in revenue and $753K in cash flow, a roughly 56 percent margin that reflects the high reimbursement and procedure mix typical of a mature surgical eye practice.

The asking price of $1.4M against $753K in EBITDA is a 1.86x multiple, which is low for a healthcare practice with these margins. That number almost always signals key-person risk: a single physician owner whose personal reputation, referral relationships, and surgical volume ARE the business. The buyer question is not whether ophthalmology is a good business (it is) but whether this cash flow survives the departure of the doctor generating it.

What makes this notable is the combination of a durable, aging-demographic-driven service line and a price that only makes sense if you can solve the physician-continuity problem. For an existing ophthalmology group, an optometrist-owned platform, or a private-equity-backed eye-care roll-up, this is a straightforward tuck-in. For a lone financial buyer with no clinical credential, it is a much harder deal to underwrite.

Why we like it

Earnings quality is strong on paper: $753K of cash flow on $1.34M of revenue is a 56 percent margin, which reflects favorable procedure reimbursement and a mature payer mix. Surgical eye care commands premium billing versus routine optometry, and that margin is the whole reason a 1.86x multiple looks interesting.
The moat is real demand tied to demographics you can forecast. Cataracts, glaucoma, macular degeneration, and diabetic eye disease all scale with an aging population, and Metro Atlanta is a large, growing market. This is care people cannot defer indefinitely regardless of the economy.
Ophthalmology is squarely recession-resistant and largely insurance-funded, including heavy Medicare exposure for the 65-plus population that drives surgical volume. Patients do not skip glaucoma treatment or cataract surgery when the economy softens, which insulates revenue better than discretionary healthcare.
The price signals a motivated seller and a fixable problem. A 1.86x multiple on a healthy medical practice is well below typical practice comps, which usually clear 3x to 5x of EBITDA. If a buyer can retain the referral base and physician production, the entry math is exceptional.

How to improve it

Lock down physician continuity before anything else. Structure an employment or earnout for the selling doctor and, in parallel, recruit or promote an associate ophthalmologist so surgical volume does not evaporate at close. Everything about this deal hinges on the cash flow surviving the owner's exit.
Add or expand an optometry layer to feed the surgical funnel. Optometrists handle routine exams and refractions at lower cost and refer medical and surgical cases up to the ophthalmologists. This widens the top of the funnel and captures margin the practice may currently be leaking to outside referrals.
Build out an optical dispensary if one does not exist or is underdeveloped. Selling frames, lenses, and contacts to an existing patient base is high-margin retail attached to visits you are already generating. Many single-physician practices leave this cash on the table.
Audit and renegotiate the payer contracts and coding. Verify that the practice is billing at appropriate levels for its procedure mix and that commercial contracts are current. Small improvements in coding accuracy and contracted rates drop almost entirely to the bottom line.
Modernize scheduling and front-office throughput. Reducing no-shows, tightening surgical scheduling, and adding online booking increases physician utilization without adding clinical capacity. In a procedure-driven practice, chair and OR time is the constraint worth optimizing.
Invest in digital patient acquisition and reputation management. A strong local SEO and reviews presence in a metro market of this size can meaningfully grow new-patient flow. This reduces dependence on a handful of referring providers tied to the departing owner.
Evaluate adding higher-margin elective procedures such as LASIK or premium intraocular lenses. These are cash-pay or partially cash-pay services that carry strong margins and diversify away from pure insurance reimbursement. They also smooth exposure to any Medicare fee-schedule pressure.

Diligence notes

Quantify key-person dependency in granular detail. Determine what percentage of revenue and surgical cases the selling physician personally generates, and whether any associate providers exist. If the doctor is the entire production engine, the 1.86x multiple is a warning, not a bargain.
Break down the payer mix and reimbursement trend. Understand the split between Medicare, commercial insurance, and cash-pay, and stress-test the model against potential Medicare fee-schedule changes. Heavy single-payer concentration is a real risk in a surgical eye practice.
Map the referral sources and their durability. Ophthalmology surgical volume often flows from optometrists and primary-care physicians whose loyalty attaches to the individual surgeon. Confirm whether those relationships transfer or walk with the seller.
Verify the cash flow figure and normalize it. Confirm the $753K is defensible EBITDA after fair-market physician compensation, since a practice's cash flow is not comparable to a passive business's if it embeds the owner-doctor's clinical labor. Adjust the true multiple accordingly.
Confirm the state of equipment, EHR, and lease. Ophthalmic diagnostic and surgical equipment is expensive and depreciates, so assess replacement timelines and any deferred capex. Also review the facility lease terms and whether the location supports future growth.
Investigate why the practice is priced to sell. A below-market multiple on a profitable medical practice usually reflects an urgent seller, a retirement without succession, or an underlying issue. Identify the real reason and price the risk into your offer.

Source

Originally listed on Sunbelt Business Brokers. View original listing →