Selling Your Medical Practice to Private Equity

By Bryan Sledge, CPA · Tax, Accounting & M&A Advisory, Tenet M&A

Over the past decade, private equity has reshaped how physicians exit and grow their practices. From dermatology and dental to cardiology, gastroenterology, and beyond, PE-backed platforms have become some of the most active — and highest-paying — buyers in healthcare. For practice owners, selling to private equity can unlock a premium valuation, growth capital, and a “second bite of the apple.” It can also mean giving up autonomy and taking on performance expectations. This guide explains how selling to private equity works, the trade-offs, and how Tenet M&A helps you decide and negotiate.

Tenet M&A advises physicians on confidential sales to private equity, platforms, and strategic buyers. When you are ready, we help you sell your practice on the best possible terms. For the broader process, see our complete guide to selling a medical practice.

What does selling to private equity mean?

In a typical PE transaction, a private-equity firm — often through a management services organization (MSO) or platform — acquires your practice, provides capital and business support, and partners with physicians to grow. Unlike selling to another doctor, selling to private equity usually keeps you involved: you continue practicing, often retain equity in the larger platform, and share in future growth. Understanding the difference between buyer types is essential; see selling to private buyers vs. MSOs or platforms and the role of private equity in healthcare.

Platform vs. add-on deals

PE buyers structure deals in two main ways. A platform deal makes your practice the foundation of a new group in a market or specialty — typically reserved for larger, well-run practices and priced at a premium. An add-on deal folds your practice into an existing platform, usually at a somewhat lower multiple but with immediate scale and infrastructure. Which path fits depends on your size, specialty, and goals. Learn more in medical practice consolidation and common deal structures in MSO transactions.

How PE deals are structured: rollover equity and the “second bite”

A defining feature of selling to private equity is rollover equity — instead of taking all cash, you reinvest a portion of your proceeds into the platform. If the platform grows and later sells or recapitalizes, that retained stake can produce a second, sometimes substantial, payout known as the “second bite of the apple.” Deals also commonly include employment agreements, compensation adjustments, earnouts, and non-compete terms. How these pieces are negotiated determines your true economics — see how deal terms impact final value.

Why private equity often pays premium valuations

PE platforms are willing to pay strong multiples of Adjusted EBITDA because they benefit from scale: they buy individual practices at one multiple and, as a larger group, are valued at a higher one — a strategy known as multiple arbitrage. Practices with growth, ancillaries, reduced owner dependence, and platform fit command the best offers. To understand how your value is set, read our medical practice valuation guide and what buyers value most.

The pros and cons of selling to private equity

Potential advantages: a premium valuation, growth capital and infrastructure, reduced administrative burden, equity upside through rollover, and support for expansion. Potential trade-offs: reduced clinical and operational autonomy, performance and governance expectations, compensation changes, and the reality that not every platform delivers on its promises. The right answer depends on your goals for value, control, and how long you want to keep practicing. Read risks and red flags in MSO transactions and what life looks like after selling to an MSO.

Is selling to private equity right for you?

Selling to private equity tends to fit physicians who want to capture value while continuing to practice, who value growth capital and support, and who are comfortable sharing governance. It fits less well for those who prioritize full autonomy or a clean, complete exit — for whom an individual buyer or a straightforward sale may be better. The only way to know is to compare real offers across buyer types, which is exactly what a competitive, advisor-led process delivers.

How Tenet M&A helps you sell to private equity

Tenet M&A levels the playing field with sophisticated PE buyers. We provide an independent valuation, run a confidential and competitive process that pits platforms against one another and against strategic buyers, and negotiate not just price but rollover terms, governance, compensation, and protections. Explore our advisory services or start a confidential conversation. This guide is educational and not tax, legal, or investment advice.

Frequently asked questions about selling to private equity

How much do private-equity firms pay for a medical practice?

PE buyers typically pay a multiple of Adjusted EBITDA that varies by specialty, size, growth, and platform fit. Larger, well-run practices — especially platform candidates — command premium multiples. A professional valuation and a competitive process are the best ways to discover your true value.

What is rollover equity and the “second bite of the apple”?

Rollover equity is the portion of your proceeds you reinvest into the buyer’s platform instead of taking as cash. If the platform later sells or recapitalizes at a higher value, that stake can produce a second payout — the “second bite of the apple” — though it also carries risk if the platform underperforms.

Will I keep control after selling to private equity?

Usually not fully. You typically continue practicing and may retain clinical input, but business decisions are shared with the platform, along with governance and performance expectations. The degree of autonomy varies by deal and is a key point to negotiate.

Should I sell to private equity or an individual buyer?

Private equity often offers a higher price and equity upside with continued involvement, while an individual buyer may allow a cleaner, complete exit. The best choice depends on your goals for value, control, and timeline — comparing real offers across buyer types is the surest way to decide.

Do I need an advisor to sell to a private-equity buyer?

Strongly recommended. PE firms negotiate these deals constantly and you likely will once. An experienced M&A advisor creates competition, benchmarks the offer, and negotiates the terms — rollover, governance, compensation, and protections — that determine your real outcome.