Selling a veterinary practice is a critical decision that will significantly impact your financial future and define your legacy. In today’s dynamic market, with rising valuations and corporate consolidations, there are both new opportunities and potential risks.
Over the last few years in particular, the sector has seen significant interest from private equity and strategic buyers, making it essential to approach any transaction with the right expertise. Since 2017, the landscape has shifted from local doctor-to-doctor sales to a market dominated by corporate buyers and private equity firms with valuations based on EBITDA (earnings before interest, taxes, depreciation, and amortization), which can substantially increase sale prices.
Selling independently gives you control and avoids fees, but demands industry knowledge, valuation expertise, and a strong network. A specialized advisor offers accurate valuations, expands your buyer pool, and effectively negotiates to maximize your sale price. Crucially, advisors also help prepare your practice to be highly attractive to buyers, optimizing financials, operations, and highlighting its strengths. This ensures the best outcome for your practice and long-term plans..
Understanding today’s practice sale landscape.
The veterinary practice market has undergone significant changes over the past decade. Below are the key factors driving this transformation and why they’re important for practice owners to consider.
- Shifting sales processes. It’s hard to minimize the impact that the move from local doctor-to-doctor sales to corporate buyers and private equity firms coming into the picture has had on the sector. This shift has brought in big budgets and EBITDA-based valuations — which can significantly increase practice sale prices. If you’re running a smaller, single clinic practice (3+ DVMs), you shouldn’t be surprised to see practice sales at a 10-13x EBITDA multiple. While this competitive landscape offers better options and offers for sellers, it also creates more complexity — particularly when trying to land a buyer who values your practice’s unique culture.
- Current market dynamics: Corporate consolidators and private investors fiercely compete for practices, creating a landscape where sellers have more options—and higher offers. However, more competition means more complexity. Finding a buyer who values your practice’s unique culture and patient care approach isn’t as straightforward, especially with corporations seeking rapid expansion.
- Regional trends in the US and Canada: The US market is seeing rapid corporate consolidation, with many independent practices moving under corporate ownership. In Canada, the trend is similar but slower, with different regulatory factors and fewer major consolidators.
In a fast-paced, high-stakes market, thoughtful planning is key to achieving the best results.
The true cost of going solo.
Going solo might seem like a cost-saving route, but many practice owners find that hidden challenges can add up, impacting the sale’s success and value.
- Hidden challenges: Going solo often means limited buyer access, preventing you from finding the best match or top offer for your practice. Valuing the practice correctly is also challenging without expert input, leading to a very real risk of undervaluation. On top of this, maintaining confidentiality throughout the process can be difficult, especially as you engage in conversations with multiple buyers. Without a professional to manage discretion, you risk early leaks that could disrupt staff morale or client trust.
- Time and resource requirements: Selling independently demands significant time, from searching for buyers to handling negotiations, drafting contracts, and managing legal paperwork. This intense time commitment can pull your focus from daily practice operations, potentially affecting revenue and overall appeal. In many cases, the opportunity cost of this distraction outweighs any savings from avoiding advisor fees.
- Common pitfalls: Without deep experience in practice sales, solo DVMs may undervalue their business, overlook deal structure options, or fail to account for tax liabilities. Missteps in legal agreements or negotiations can lead to unfavorable terms or even legal complications. These are complex transactions, and inexperienced independent sellers risk costly errors that might put a cap on the overall financial outcome or create needless obstacles during the transition phase. This is where working with advisors can realistically maximize your results.
- Impact on final practice value: Ultimately, solo practice owners often settle for lower offers than those working with advisors. Advisors bring professional negotiation tactics and accurate valuations that maximize value—without them, the final sale price could fall short.
The challenges of selling solo can significantly reduce sale proceeds and make the transition more complicated than anticipated.
Value of specialized guidance.
Specialized advisors bring expertise and connections that not only streamline the sale but can also elevate its value.
- Comprehensive financial analysis: Advisors ensure accurate valuations by looking beyond revenue to assess factors like financial health, EBITDA, and intangible assets such as loyal clientele. They know how to position your practice to reflect its full value, leveraging current market insights to attract competitive offers. An advisor’s ability to analyze these critical details can substantially affect the final sale price.
- Network access and buyer relationships: Advisors come with established connections to corporate consolidators, private equity firms, and other DVMs in the market for acquisitions. An advisor’s network means access to well-matched buyers, not just any buyer but those who understand and appreciate the unique culture of your practice.
- Navigation of complex deal structures: Many practice sales involve intricate deal structures that require expertise to navigate effectively. Advisors can structure deals to optimize post-tax proceeds, incorporate earn-outs, and ensure the buyer commits to staff continuity. They help you avoid unfavorable terms and guide you through critical details that protect your financial and operational interests.
- Cultural fit and legacy preservation: A specialized advisor can align your sale with your practice’s values, finding a buyer who respects your team and patient care standards. They prioritize your practice’s legacy by negotiating terms that support a gradual, respectful ownership transition. For more information on the advantages of working with a skilled advisor, learn about selling your veterinary practice.
With a specialized advisor, you gain valuable insights and guidance, potentially achieving a higher sale price while safeguarding the legacy you’ve built.
Next steps.
Selling your veterinary practice requires the right approach for financial success and peace of mind. While going solo offers control, an advisor’s expertise is invaluable in today’s complex market. A specialized advisor connects you with a broader buyer network, provides accurate valuations, and brings skilled negotiation, often leading to a smoother, more profitable transition.
At myVETgroup, we have a proven track record, having completed $2B of practice transitions. Our team is uniquely positioned to guide you—comprised of veterinarians, private equity buyers, and corporate consolidator executives. So you know we’ve been on both sides of the table. Our experience ensures we can help you navigate the process effectively.
Ready to start planning? Book a call with us today to discuss how we can help you achieve your goals and honor your legacy.
