Why valuation is harder than it looks
GP practice valuation is not a single multiple applied to a single number. At a practice level, cashflows blend fixed capitation with variable QOF, Enhanced Services and private fees, sitting behind a partnership structure that can obscure the true profitability of the underlying business. Getting valuation right means stripping all of that back to a clean, recurring, fundable number — and then applying the right multiple for the specific transaction.
What actually drives value
The core drivers of GP practice value are relatively consistent across the UK and Ireland:
- List quality — active list size, demographic mix, prevalence of long-term conditions, and list stability over time
- Contract profile — GMS vs PMS vs APMS in the UK; GMS + STCs in Ireland; contract tenure and any minor adjustments priced in
- QOF and Enhanced Services — history of achievement and the sustainability of that achievement under new ownership
- Private income — self-pay, travel clinics, occupational health, medicals and cosmetic services
- Clinical workforce — salaried GP ratio, locum reliance, nurse-led capacity, and partnership stability
- Premises — freehold with Notional Rent, leasehold with CMR, or purpose-built PFI-style primary care centre
- Regulatory standing — CQC or HIQA rating, complaints profile, and any open regulatory issues
Adjusted EBITDA — the starting point
Reported partnership profit is rarely the right number for valuation. Adjustments typically include:
- Normalised partner drawings replaced by market-rate GP salaries
- Locum cost normalised to a planned rota
- Related-party rent stripped or replaced by Current Market Rent
- Non-recurring QOF catch-ups, one-off Enhanced Services income, and rebate adjustments removed
- Pension and practice administration costs normalised
The point of these adjustments is to arrive at an EBITDA figure that reflects the practice running under professional ownership, not under the specific profit-shape of the outgoing partners. That figure is what an acquirer's lender will underwrite against.
Multiples — single-practice vs platform
There is a genuine gap between what a single practice trades for and what a group trades for. A stable single-practice deal in the UK or Ireland typically clears at 3–6x adjusted EBITDA. A platform of several practices with a sensible regional footprint, institutional reporting and scale benefits can clear at materially higher multiples. European primary care comparables over the last five years include:
- Mehiläinen (Finland, 2018): 360 clinics, €1.8bn EV, 21.2x EV/EBITDA
- MVZ Holding (Switzerland, 2017): 25 clinics, 17.1x EV/EBITDA
- Scanmed (Poland, 2020): 42 clinics, 10.1x EV/EBITDA
That gap — 3–6x at the single-practice level vs 10–21x at platform level — is the economic engine for buy-and-build strategies in primary care. It is also why credible platforms are often comfortable paying the upper end of the single-practice range to a well-run target.
Beware the multiple arbitrage argument when selling. Platforms justify higher multiples because of real scale and integration economics, but a seller who assumes they will be paid platform-like multiples for a standalone practice is almost always disappointed.
Price per patient and other heuristics
Some brokers and buyers still quote GP practice value on a price-per-patient basis. It is a useful sanity check but a poor primary valuation metric. Two practices with identical list sizes can have very different economics depending on contract mix, QOF profile and private income. Price per patient is also easily distorted by passive vs active list definitions. Use it alongside EBITDA multiples, not in place of them.
Ireland vs UK — structural differences
Irish GP practices typically price slightly stronger than UK equivalents on a like-for-like basis. Reasons include a GP shortfall of around 1,750 doctors against ICGP recommendations, Sláinte Care-driven shifts of activity into primary care, higher proportion of private out-of-pocket income (~30% nationally), and a more concentrated buyer base of platform consolidators.
UK valuation is more sensitive to contract type, CQC rating and PCN alignment. PMS and APMS practices with above-average private income and strong Additional Roles Reimbursement Scheme (ARRS) utilisation tend to price above the basic GMS comparable.
Stress-testing before you offer
Before making an offer, pressure-test the valuation on three axes:
- Downside list — what if list size falls 5% post-completion, or the active ratio proves lower than represented?
- QOF normalisation — what if achievement reverts to the three-year mean rather than the most recent peak?
- Workforce — what does the number look like if you have to replace a key salaried GP with a locum for six months?
If the deal still works under sensible downside cases, your offer is anchored to something real. If it only works on the upside, step back.
Once you have the right number, the next job is to fund it. For that, see our guide to funding considerations for GP acquisitions — and if you are still sizing up whether this is the right step, our guide to buying your first GP practice covers the wider context.