When practice owners start exploring a sale, they sometimes wonder whether they need a certified business valuation – the formal, credentialed appraisal used in legal and accounting contexts. The short answer for most healthcare practice sales is: probably not. Here’s why, and when a certified valuation actually does make sense.
What a certified valuation is
A certified business valuation is performed by a credentialed appraiser – typically a Certified Valuation Analyst (CVA) or Accredited in Business Valuation (ABV) – and follows formal standards set by organizations like the National Association of Certified Valuators and Analysts (NACVA) or the AICPA.
These valuations are detailed, methodologically rigorous, and documented in a way that holds up to scrutiny in a legal or regulatory context. They’re also expensive and time-consuming to produce.
The limitations in a practice sale context
A certified valuation is built around standardized methodology – income approach, market approach, asset approach – applied consistently regardless of specialty or market conditions. It produces a defensible number.
But what a buyer actually pays for a practice in a competitive process is driven by factors a certified valuation isn’t designed to capture: current buyer appetite, how many groups are actively building in your specialty, the quality of your EBITDA after add-backs, and how your specific practice compares to what buyers have seen recently.
A certified valuation tells you what your practice is worth by a formula. It doesn’t tell you what buyers will actually pay today – and those two numbers are often meaningfully different.
When a certified valuation actually makes sense
There are situations where a certified valuation is the right tool:
- Partnership disputes – when co-owners disagree on practice value and need a neutral, defensible opinion
- Divorce proceedings – courts require certified valuations when a practice is a marital asset
- Estate planning and gifting – tax-compliant transfer of practice ownership interests
- Lender requirements – some lenders require certified valuations for SBA loans or buy-in financing
- Buy-sell agreement triggers – when a formal agreement specifies a certified appraisal for valuation events
In these situations, a certified valuation is often legally required or practically necessary. For a standard voluntary sale to a corporate buyer or private equity group, it’s not.
What modern buyers actually want
Sophisticated buyers – PE groups, DSOs, dermatology platforms – don’t rely on seller-provided certified valuations. They do their own financial due diligence and build their own offer models. What they want from sellers is clean, well-organized financial records that support a clear picture of adjusted EBITDA.
A well-prepared Opinion of Value from an experienced M&A advisor – one that identifies add-backs, normalizes financials, and positions the practice relative to comparable transactions – is far more useful in a real-world sale process than a formal certified appraisal.
The right approach for a practice sale
For practice owners preparing for a market-driven sale, the most valuable analysis is one that:
- Identifies and documents all legitimate add-backs to increase adjusted EBITDA
- Positions the practice relative to current buyer activity in the specialty
- Gives you a realistic, defensible range to enter negotiations with
- Flags any issues worth addressing before going to market
- Is prepared by someone who knows what buyers are actually paying right now
- Translates directly into a competitive buyer process
That’s a different exercise than a certified appraisal – and for most practice owners, it’s the more useful one.
Talk to PTG about what a practice valuation analysis would look like for your situation – no commitment required.
Frequently asked questions
Do I need a certified valuation to sell my healthcare practice?
In most cases, no. Buyers in a standard practice sale conduct their own due diligence and don’t rely on seller-provided certified valuations. A certified appraisal is typically required for legal proceedings, partnership disputes, divorce cases, or lender requirements – not for a market-driven sale to a corporate buyer or PE group.
What’s the difference between a certified valuation and an Opinion of Value?
A certified valuation is performed by a credentialed appraiser following formal standards and is designed to hold up in legal or regulatory contexts. An Opinion of Value is a market-driven analysis prepared by an M&A advisor that reflects current buyer activity, EBITDA normalization, and comparable transactions. For a practice sale, the Opinion of Value is typically more actionable and practically useful.
When would a certified valuation be required?
Certified valuations are most commonly required for partnership disputes, divorce proceedings where the practice is a marital asset, estate planning and gift tax purposes, SBA loan applications, and buy-sell agreement triggers. If your situation involves any of these, talk to your attorney or CPA about whether a certified valuation is needed.
How do I know what my practice is actually worth in today’s market?
The most reliable way is to work with an advisor who is actively representing sellers in your specialty and knows what buyers are paying right now. A market-based analysis that accounts for add-backs, payer mix, provider concentration, and current buyer activity will give you a much more accurate and actionable number than any formula-based certified appraisal.
