$6.6M
$3.4M
5.3x
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Founded over two decades ago, this practice has built a loyal patient base and a strong reputation in its market as the go-to destination for women’s health across all life stages. The clinic sees patients for everything from routine gynecology and preventive care to complex urogynecological surgery, in-office procedures, diagnostic ultrasound, and urodynamics testing. All robotic and laparoscopic surgeries are performed at a local hospital, while a comprehensive menu of in-office procedures, including hysteroscopy, endometrial ablation, colposcopy, LEEP, bladder Botox, cystoscopy, and more, is performed directly at the clinic, generating strong ancillary revenue that is not dependent on hospital scheduling.
Why we like it
- Earnings quality is the headline: $3.38M of cash flow on $6.58M of revenue is a 51 percent margin, driven largely by high-margin in-office procedures that keep facility fees in-house rather than handing them to the hospital. That is a structurally advantaged medical practice, not a commodity clinic living on insurance reimbursement alone.
- Women's health is about as recession-resistant as healthcare gets, since preventive gynecology, surgery, and diagnostics are needs, not wants, and demand is largely non-discretionary across all life stages. Patients do not defer bladder Botox, LEEP, or diagnostic ultrasound because the market dipped.
- The moat is real: a two-decade reputation as the market's go-to women's health destination creates referral flywheels, physician loyalty, and patient stickiness that a new entrant cannot buy quickly. Reputation and referral relationships in a specialty practice are genuine barriers to entry.
- The in-office procedure menu (hysteroscopy, endometrial ablation, colposcopy, cystoscopy, urodynamics, ultrasound) diversifies revenue away from hospital scheduling and creates ancillary income that scales with patient volume without adding surgical overhead. This is the kind of boring, durable cash flow that compounds.
- Central Florida demographics are a tailwind: a growing, aging population increases demand for both routine gynecology and urogynecology services like bladder and pelvic floor treatment, which skew to older women. The clinic sits in a market where the addressable patient base is expanding, not shrinking.
How to improve it
- Nail physician retention in the first 90 days by locking selling and staff physicians into multi-year employment agreements with non-competes and performance incentives. In a practice priced at 5.33x, the entire thesis collapses if the rainmaker physician leaves, so binding continuity is initiative number one.
- Audit and expand the in-office procedure mix, since these are the highest-margin services and the least dependent on hospital scheduling. Adding capacity, staff, or a second procedure suite could shift more surgical volume in-house and capture facility fees currently going to the hospital.
- Optimize payer contracts and coding, because a specialty practice this size almost always has money left on the table in reimbursement rates and undercoded encounters. A targeted revenue-cycle review can lift collections several points without a single new patient.
- Add or grow ancillary lines like diagnostic ultrasound, urodynamics, and cash-pay aesthetic or wellness services aimed at the existing loyal female patient base. Cross-selling to an established, trusting patient list is the cheapest revenue you will ever buy.
- Formalize referral relationships with primary care, hospitals, and OB providers to widen the top of the funnel and reduce dependence on any single referral source. Documenting and deepening these channels de-risks patient acquisition post-transition.
- Recruit an additional physician or advanced practice provider (NP/PA) to absorb routine gynecology visits, freeing the surgeons for higher-value procedures. This leverages the brand to grow volume without proportional cost and reduces single-physician key-man risk.
- Invest in patient scheduling, recall, and digital front-door tools to cut no-shows and fill open in-office procedure slots. Small utilization gains in a 51 percent margin business drop almost entirely to the bottom line.
Diligence notes
- Quantify exactly how much of the $3.38M cash flow is generated by the selling physician(s) personally versus the practice as an enterprise. This is the single most important number in the deal, because physician-dependent earnings do not justify a 5.33x enterprise multiple if they leave with the seller.
- Verify the payer mix and reimbursement stability, including Medicare/Medicaid exposure, commercial contract rates, and any concentration in a single insurer. Reimbursement cuts or contract renegotiations can materially move margin in a practice this dependent on procedure billing.
- Confirm the SDE/EBITDA definition and normalize it: check what physician compensation is baked in, whether the $3.38M is pre or post fair-market physician salaries, and how add-backs were calculated. A 51 percent margin is unusual, so reconcile it against tax returns and merchant statements.
- Review malpractice history, current coverage, tail insurance obligations, and any pending litigation, since OB/GYN and surgical practices carry elevated liability risk. Understand who pays for tail coverage on departing physicians as part of the deal structure.
- Examine the hospital relationship for robotic and laparoscopic surgery, including privileges, exclusivity, and any risk that a change in hospital affiliation disrupts surgical volume. A meaningful slice of revenue depends on continued access to that facility.
- Confirm the real estate arrangement and lease terms, since the asking price appears to be for operations only. Verify the clinic's lease rate, remaining term, and renewal options so occupancy cost is not a hidden variable post-close.
Source
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