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Post being replied to

Not the orginal poster by 609StPeteSt

But having sat through at least 2 of these presentations, the standard deal is this:

PE firm forms valuation of your practice based on EBITDA. They offer you a multiple of EBITDA in a lump sum and then a reduced salary with incentives for some period of time after (usually about 5 years). The enticement for the physician is that this lump sum is realized as a capital gain and therefore not subject to marginal tax rates like regular income.

The other enticement is that they will consolidate with multiple other practices to increase your valuation for a second sell to a larger PE firm, at which point you will realize another windfall.

There is really not a "Secret sauce" to making you leaner - they were fairly candid that most of the time they just increase your throughput. There are some efficiencies realized, but not a ton.

It's attractive if you are at the end of your career and looking for a nice parachute.