How Long Does It Take to Sell a Physical Therapy Practice?

One of the first practical questions every seller asks is how long the process takes. The answer depends on how quickly you can provide data, how competitive the auction is, and the speed of the buyer's due diligence team — but a realistic range for a well-managed sale is six to twelve months from engagement to close.

Here is a phase-by-phase breakdown of where that time goes.

Phase 1: Preparation and Financial Recasting (Weeks 1–4)

Before a single buyer is contacted, your advisor needs to build the marketing materials that will represent your practice in the market. This includes the anonymous teaser, the confidential information memorandum, and — most importantly — the accrual-adjusted EBITDA calculation and addback analysis.

The speed of this phase is almost entirely determined by how quickly you can provide financial records. Sellers who have clean, organized three-year financial histories, current profit and loss statements, and an updated accounts receivable aging report move through this phase in two to three weeks. Sellers who need to reconstruct historical records often spend four to six weeks here.

Phase 2: Auction Process — Teaser to LOI (Weeks 4–12)

Once marketing materials are approved and the buyer list is confirmed, the auction begins. Buyers receive an anonymous teaser and, upon signing an NDA, access to the full data room and confidential information memorandum.

Interested buyers will request management calls and potentially after-hours site visits. Additional data requests are common and normal — buyers are trying to understand your practice deeply enough to make a confident offer. This phase typically runs six to nine weeks and concludes with an LOI deadline, at which point all interested buyers submit their best and final offers simultaneously.

The blind-bid structure of a well-run auction is critical during this phase. When buyers don't know what others are bidding, they submit what they genuinely believe the practice is worth rather than just incrementally outbidding a known competitor. This consistently produces higher offers than sequential negotiation with a single buyer.

Phase 3: LOI Selection and Negotiation (Weeks 12–14)

After LOIs are received, seller and advisor review every offer — not just the headline number. Key terms to evaluate include deal structure (what percentage is paid at close vs. held in escrow or tied to earnout performance), equity retention options, employment agreement length, non-compete scope, and cultural fit signals from the management calls.

Reference calls on the shortlisted buyers typically happen here. Speaking with practice owners who have previously sold to a given buyer is one of the most valuable inputs in the selection process. Once a buyer is selected and the LOI negotiated to acceptable terms, both parties sign and move into exclusivity.

Phase 4: Due Diligence (Days 1–120 of Exclusivity)

Due diligence is the longest and most intensive phase. The buyer deploys three concurrent workstreams: financial diligence (a quality-of-earnings audit by third-party accountants), clinical compliance review (a chart audit focused on coding, billing, and documentation), and legal and structural review (clearing liens, assigning leases, reviewing corporate documents).

Expect hundreds of data requests. This is standard. Sellers who stay organized and responsive move through this phase in 60–90 days. Sellers who are slow to respond or have records issues can extend this phase to 120 days or more — and extended timelines create risk of deal fatigue and re-trading.

Buyers who find minor compliance issues during chart audits are generally not looking for reasons to walk — they are looking for systemic risk. Most practices have some minor billing irregularities that are treated as training opportunities rather than deal-killers. An experienced advisor will help frame these appropriately and defend your EBITDA against aggressive adjustments.

Phase 5: Closing

Once due diligence is complete and both parties are satisfied with the Definitive Purchase Agreement, the deal closes. Wire transfers and lease assignments are finalized, the buyer initiates their own provider enrollment and credentialing with payers, and you receive your proceeds.

It is worth noting that at any point through the LOI phase, you can pause or withdraw without owing Mihama anything. Many sellers go through the full auction process simply to understand how the market values their practice — and then make an informed decision about whether and when to sell.