Pillar Guide
Buying or Selling a
Texas Medical Practice
A physician-focused roadmap through every phase of a practice transaction — from first conversation to closing and integration.
Selling or buying a medical practice is typically a multi-year process, not a transaction. The physicians who achieve the best outcomes — on price, on terms, and on post-closing quality of life — begin the work well before any buyer is at the table. This roadmap walks through the six phases we guide our physician clients through, whether they are selling to private equity, acquiring a retiring colleague's practice, or merging with peers.
Phase 1
Strategy & Readiness
Months 24–12 before closing
- Define owner goals: price, timing, legacy, post-closing role
- Clean up corporate records, cap table, and buy-sell
- Normalize EBITDA and improve reporting quality
- Address payer contract, credentialing, and compliance gaps
- Engage healthcare-focused M&A advisor and legal counsel
Phase 2
Go-to-Market
Months 12–6 before closing
- Confidential Information Memorandum (CIM) and teaser
- Buyer list curation (strategic, PE platform, hospital, physician)
- NDAs, initial meetings, and management presentations
- Indication of Interest (IOI) and initial valuation indications
- Select finalists for LOI stage
Phase 3
LOI & Exclusivity
Months 6–4 before closing
- Negotiate Letter of Intent: price, structure, rollover, employment terms
- Earn-out metrics, working capital peg, escrow size
- Exclusivity period (typically 45–90 days)
- Kickoff legal, financial, tax, regulatory, and HR diligence
Phase 4
Due Diligence & Definitive Agreements
Months 4–1 before closing
- Full data-room build and diligence responses
- Quality of Earnings report by buyer's accountants
- Purchase Agreement (APA or SPA) negotiation
- Physician employment and rollover documents
- MSO structuring where required
Phase 5
Closing & Funds Flow
Closing week
- Signed definitive agreements and disclosure schedules
- Regulatory filings and third-party consents
- Wire instructions and funds flow memo
- Escrow funding and rollover equity documentation
- Announcement plan for patients, staff, and referral sources
Phase 6
Post-Closing Integration
Months 1–12 after closing
- Credentialing and payer contract novation
- EMR, billing, and RCM transition
- HR, benefits, and employment handbook alignment
- Working-capital true-up and earn-out tracking
- Cultural integration and clinical autonomy preservation
Critical Legal Terms to Watch
Purchase Price Structure
Cash at close, rollover equity, earn-outs, and escrow holdbacks dramatically change what a physician actually receives.
Working Capital Peg
The 'normalized' working capital left in the practice at closing. Sellers routinely lose six figures to aggressive pegs.
Reps, Warranties & Indemnification
Caps, survival periods, basket amounts, and R&W insurance allocate risk between buyer and seller for years after closing.
Physician Employment Terms
Compensation, productivity expectations, restrictive covenants, and call schedule — often negotiated in the final days but most important for daily life.
Regulatory Consents
Payer novations, credentialing, DEA, and CLIA transitions often dictate the closing timeline.
MSO & Corporate-Practice Compliance
Because Texas prohibits non-physician ownership of medical practices, PE-backed deals require a compliant MSO structure with careful documentation.
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