Physical Therapy Market Offers Buyers Significant Opportunities

The roughly $52 billion physical therapy market, which is expected to grow around 3% annually through 2024,1 includes providers addressing a wide range of needs—from orthopedic, sports-related, and pediatric, to cardiovascular, neurological, and geriatric. Such services have never been more diverse, available, and accessible, and that translates into a thriving market that holds significant opportunities for buyers looking to enter or extend their presence in the sector. With restrictions now lifting on “non-essential” healthcare services, the physical therapy market is poised to rebound.

Overall, demand for physical rehabilitation services is growing strongly due to the confluence of a number of factors, including people’s increasing desire to live an active lifestyle longer in life, the aging of the U.S. population, rehabilitation services’ compelling care benefits and cost advantages, and easier patient access to treatment.

Meeting this demand is a highly fragmented collection of providers: There are approximately 18,000 outpatient physical therapy clinics in the country, with only a select few national providers of scale. Growing demand plus provider fragmentation results in plenty of opportunities for buyers and a compelling proposition for established platforms with the infrastructure in place to grow both through new clinic openings and consolidation.

Accordingly, the market remains an area of keen buyer interest, with consistent transaction activity and strong valuations relative to other healthcare services sectors. Recent years have seen the emergence of the next wave of mid-sized platforms with 150 clinics or more, as well as numerous smaller, private equity-backed providers at early stages of their growth trajectory. Viable strategic buyers of scale continue to grow and expand through tuck-in acquisitions and combinations with other platforms.

There’s a lot for buyers to like in this market, which we explore in more detail in our Physical Therapy Market Overview. 

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Andy Dixon, Managing Director

Cheairs Porter, Managing Director

1. Based on data from U.S. Physical Therapy and IBIS Industry Reports

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