The physical therapy industry is a large and steady-growing sub-segment within the healthcare industry, focused on improving mobility, managing pain, and enhancing overall quality of life for patients, often after a significant injury or surgical procedure. Services are provided in various settings including outpatient clinics, hospitals, post-acute facilities, and at-home, and address a wide range of conditions from orthopedic and neurological disorders to cardiopulmonary issues. According to one source, the U.S. physical therapy market is valued at approximately $49.48 billion, with projections to reach $61.70 billion by 2030, implying a CAGR of 4.6%.
Key Growth Drivers
Key growth drivers for the industry include the following:
Aging Population: The growing number of older adults, particularly baby boomers, is significantly increasing demand for physical therapy services. By 2030, all baby boomers will be over 65, representing about 20% of the U.S. population. This demographic shift is driving the need for services related to mobility maintenance, fall prevention, and management of age-related conditions like arthritis and osteoporosis.
Prevalence of Chronic Conditions: The rising incidence of chronic diseases such as diabetes, cardiovascular disorders, and obesity is fueling the need for physical therapy interventions. These conditions often require long-term rehabilitation and management, contributing to sustained industry growth.
Technological Advancements: Integration of artificial intelligence, robotics, and virtual reality in physical therapy is enhancing treatment efficiency and patient engagement. These technologies are revolutionizing rehabilitation processes, making treatments more interactive and personalized. However, many of these technologies may be used to compete with, rather than augment, traditional physical therapy.
Shift Towards Preventive Care: Increased awareness of the benefits of physical therapy in preventing injuries and maintaining overall wellness is driving proactive patient engagement. This trend is expanding the market beyond traditional rehabilitation services.
Expansion of Telehealth Services: The adoption of telehealth in physical therapy has significantly increased, especially post-pandemic. This trend is improving accessibility to care, particularly for patients in remote areas, and is expected to continue driving market growth.
Sports and Occupational Injuries: The growing participation in sports activities and the prevalence of work-related injuries are creating a consistent demand for physical therapy services. This driver particularly impacts orthopedic and sports rehabilitation segments of the industry.
Physical Therapy M&A Deal Volume
Following years of increasing private equity involvement in the segment dating back to 1995, the number of announced physical therapy M&A transactions has fallen off a cliff in recent quarters following the late 2021 peak. It's unclear what exactly is leading to the decline, beyond general healthcare M&A market softness and possibly concerns around the viability of virtual technology platforms that can compete with traditional clinic-based physical therapists.
The decline in total volume corresponds with non-existent PE platform buyout activity, as a grand total of zero platform buyouts were announced in 2024. That may change as Grant Avenue's H2Health, which is the result of the 2019 merger of Heartland Rehabilitation and health staffing company Milestone, is reportedly exploring a sale marketed based on $25 to 30 million EBITDA. Milestone is considered "non-core" to H2's business at this point, and is in the process of being wound down, making it a pure-play physical therapy provider. However, Confluent Health, a platform of significant size, reportedly explored a potential sale in 2024 and called it off at the beginning of 2025, hinting a continued lack of interest from large buyout firms.
Physical Therapy EBITDA Multiples
Single Clinics or Small Portfolios (typically revenue under $5M):
Small practices usually sell for lower multiples, ranging from 3x to 6x EBITDA. The lower multiple is often due to higher operational risk, lower revenue diversification, and limited geographic reach, as well as a heavy reliance on the owner / operator, which can lead to employee retention and business continuity concerns.
Medium-Sized, Established Regional Physical Therapy Clinic Chains (revenue of $5-50M):
Larger, more established companies with proven profitability, strong brand equity, and a broader customer base may command higher multiples. These can range from 5x to 9x EBITDA, depending on size, local market conditions, service mix, growth rate, and the stability of the cash flow.
Large Physical Therapy Platforms:
Large platforms with strong, continuing management teams can command multiples in the 9x to 15x EBITDA range, especially if they have demonstrated the ability to grow quickly with favorable unit economics.
Metro Physical Therapy / Metro MSO Acquired by U.S. Physical Therapy
According to the press release issued by USPH, Metro MSO currently generates approximately $64.0 million in annual revenue and approximately $12.0 million in annual EBITDA on a consolidated basis, implying enterprise multiples of 2.4x revenue and 12.8x EBITDA (using a $153 million EV). The implied EBITDA multiple is in line with historical physical therapy transactions of similar size.
While the implied multiple is in line with the precedents, this represents a slight decline from the 14x to 16x multiples reported in the 2019-2021 timeframe. It is also nearly identical to the 12.5x multiple reported from the MOTION PT / Confluent deal in early 2023.
Factors Impacting the EBITDA Multiple for Physical Therapy Providers
Acquisition multiples are a function of perceived risk and growth. Key considerations within the occupational medicine industry include the following:
Revenue Diversification & Payer Mix – Practices with a balanced mix of commercial insurance, Medicare, workers’ compensation, and cash-pay services tend to command higher multiples, as they are less dependent on low-reimbursement payers.
Profit Margins & Operational Efficiency – Higher EBITDA margins, driven by optimized therapist productivity, efficient scheduling, and strong billing practices, result in stronger valuations.
Scale & Number of Locations – Multi-location practices with regional density typically receive higher multiples due to scalability, brand strength, and operational efficiencies.
Referral Sources & Patient Volume Stability – A diversified and stable referral network (from physicians, employers, and direct access patients) reduces risk and increases valuation.
Regulatory & Compliance Risks – Adherence to Medicare regulations, state licensing, and billing compliance minimizes legal risks, making the practice more attractive to buyers.
Owner Dependence & Management Structure – Practices with a strong management team and minimal reliance on the owner for day-to-day operations are valued higher, as they present a smoother transition for buyers.
Active Physical Therapy Listings
The following is a summary of a few actively listed physical therapy deals from our active listings database:
(links will break over time)
Nevada Multi-Location Physical Therapy Practice: Listed for sale at $5.25m, this practice is marketed based on estimated revenue and adjusted EBITDA of $4m and $803k, respectively, implying multiples of 1.3x revenue and 6.6x EBITDA.
Florida Multi-Location Physical Therapy Practice: Listed for sale at $2.07m, this practice is marketed based on estimated revenue and adjusted EBITDA of $1.8m and $392k, respectively, implying multiples of 1.2x revenue and 5.3x EBITDA. The figures presented assume a fair market value salary for a lead physical therapist / owner of $120k ($512k owner cash flow).
West Virginia Physical Therapy Practice w/ 3 Locations: Listed for sale at $1.6m, this practice is marketed based on estimated revenue and owner cash flow of $1.5m and $638k, respectively, implying multiples of 1.1x revenue and 2.7x owner cash flow.
Recent Physical Therapy Deals
Read Scope Research's take on other physical therapy M&A transactions:
MOTION PT acquired by Confluent Health
About Scope Research
The Scope Research Healthcare M&A Valuation Database currently has financial details for 64 physical therapy deals going back to 2010, 22 of which include reported EBITDA multiples. The physical therapy data can be purchased individually, while our affordable annual subscriptions provide access to all of our healthcare M&A databases and segments, updated continuously.
Don't hesitate to reach out to Will Hamilton at will@scoperesearch.co with questions about our physical therapy valuation services or healthcare M&A databases.