SoCal Cardiology Practice, 20-Year 3-Provider Group in North LA County

$3.9M

Revenue

$1.0M

SDE

4.3x

Multiple

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Full Editorial Writeup

This is a 20-plus year cardiology group in North Los Angeles County running with three medical providers and 11 staff. The practice delivers a full stack of cardiac care: in-office diagnostics like Echo, Stress Echo, Nuclear imaging, and Holter monitoring, plus a newer Remote Patient Monitoring and Chronic Care Management program that adds a monthly billing layer on top of episodic visits. The facility is turnkey, state of the art, and sits close to a large hospital, which matters for referral flow and procedure volume.

The payer mix is the story here: a strong blend of PPO, Medicare fee-for-service, and select HMO contracts. Cardiology skews to an older, chronically ill patient panel, which means high per-patient lifetime value, predictable follow-up cadence, and durable Medicare reimbursement. On roughly $3.93M of revenue the practice throws off about $1M of normalized adjusted EBITDA (2023-2025 average), a mid-20s percent margin that is healthy for a specialty group of this size.

At $4.25M the deal is priced at 4.25x cash flow, with SBA or conventional financing available for a qualified buyer. The seller is retiring and offering a long-term transition, and the landlord will cooperate on a new long-term lease. This is a physician-buyer or physician-group-backed deal given California corporate practice of medicine rules, so the buyer universe is narrow but the asset is legitimate.

Why we like it

Earnings quality is strong for a specialty practice: about $1M of normalized EBITDA on $3.93M revenue is a mid-20s percent margin, and it is an average across 2023-2025 rather than a single cherry-picked year. Cardiology diagnostics (Echo, Nuclear, Stress) carry solid reimbursement, and the new RPM/CCM program layers in monthly recurring Medicare billing on top of visit fees.
Durability is excellent because cardiac care is non-discretionary and the panel skews older and chronically ill, meaning patients return on a fixed clinical cadence regardless of the economy. Twenty-plus years of operation, proximity to a large hospital, and established PPO/Medicare/HMO contracts create real referral and payer moats that a new entrant cannot replicate quickly.
Market tailwinds favor the buyer: North LA County has favorable payer demographics and an aging population that drives sustained cardiac demand. The seller projects 15 percent-plus growth in 2026, and the facility has ample room for expansion, so there is a credible organic runway without capex-heavy build-out.
The operator advantage is a clean, financeable acquisition at 4.25x with SBA or conventional debt available, a retiring seller committed to a long transition, and landlord cooperation on a new lease. Eleven trained staff and three providers mean the practice does not collapse when the owner leaves, which is the number one risk in physician-dependent deals.

How to improve it

Scale the RPM/CCM program aggressively in the first 90 days since it is new and underpenetrated. Every eligible Medicare patient enrolled adds recurring monthly reimbursement with minimal marginal cost, converting episodic revenue into predictable annuity-style cash flow.
Audit diagnostic utilization and referral capture to ensure Echo, Nuclear, and Stress volumes are running at facility capacity. In-house imaging is the highest-margin revenue line, so pulling ancillary studies back in-house instead of referring them out is immediate margin.
Renegotiate or add payer contracts, focusing on optimizing the PPO and HMO fee schedules and confirming favorable Medicare rates. Even a few points of reimbursement improvement flows almost entirely to the bottom line given fixed staffing.
Recruit or contract a fourth provider (NP, PA, or additional cardiologist) to absorb the projected 15 percent growth and reduce single-physician key-person risk. The facility has expansion room, so adding provider capacity is the clearest path to growing the $1M EBITDA base.
Lock in provider retention with employment agreements and non-competes before close, since the entire valuation rests on the three providers staying. Structure earnouts or retention bonuses if any provider is the departing owner-physician.
Modernize patient acquisition with a referral-focused outreach program to nearby primary care groups and the adjacent hospital. Cardiology growth is driven by referral relationships, so a formalized liaison effort is cheap and high-yield.
Tighten revenue cycle management by reviewing days-in-AR, denial rates, and collections on the Medicare and PPO books. Specialty practices routinely leave 3 to 8 percent of collectible revenue on the table through billing inefficiency.

Diligence notes

Confirm the California corporate practice of medicine structure and whether the buyer must be a licensed physician or use an MSO/friendly-PC arrangement. This determines the eligible buyer universe and how the deal must be papered, and it is the single biggest structural gate on this transaction.
Scrutinize the EBITDA normalization: get the add-back schedule, confirm the three providers' compensation is at fair-market replacement cost, and verify that the $1M is a true owner-independent figure. If the owner-physician's clinical production is baked into cash flow, the real transferable earnings are lower.
Validate the payer mix and reimbursement trends across PPO, Medicare FFS, and HMO, and stress-test against known Medicare cardiology fee schedule changes. Also confirm no material single-payer concentration and that HMO capitation, if any, is priced correctly.
Diligence the RPM/CCM program's compliance, documentation, and billing integrity, since these codes are audit magnets for Medicare. Confirm enrollment counts, consent processes, and that the projected growth is not dependent on aggressive or non-compliant billing.
Verify the lease terms and landlord's willingness on a new long-term lease, since the entire operation depends on this location near the hospital. Confirm rent escalators and that the facility improvements convey without additional cost.
Assess provider retention and the ownership stake of each of the three providers. Determine which provider is the retiring seller, whether the other two are employees or partners, and secure binding commitments before funding.

Source

Originally listed on BizBuySell. View original listing →