How To Sell A Veterinary Practice: A Complete Guide

Imagine this: You've built a thriving veterinary practice, a center for furry companion care in your community. You've poured your heart and soul into providing exceptional care, building a talented and passionate team, and now, you're considering your next move.  Perhaps you're nearing retirement or simply seeking a renewed focus on what you love most – practicing veterinary medicine.

We specialize in guiding veterinary practice owners like you through a smooth and rewarding transition. Whether you're contemplating an exit strategy or simply seeking ways to streamline operations and free up your time, we're here to support you. In this guide, you’ll find clear and detailed tips to help you decide on whether to sell. Further, you’ll receive the information you need to have a smoother, less stressful sales experience, while ultimately getting the best offer for your veterinary hospital – the perfect cultural fit, deal structure, and buyer.

Considering Selling Your Practice?

You likely have a lot of questions:

• Is now the right time to sell?
• What is my practice worth?
• How do I navigate the sales process?
• How do I find the right buyer?
• How can I ensure a smooth transition for my staff and clients?
• What happens after the sale?

Before we review the guide, here's a brief intro to us. The team at Evergreen M&A provides personalized guidance and support every step of the way. We'll help you:

• Make informed decisions: Explore your options and understand the current market landscape.
• Maximize your value: We'll help you prepare your practice for a successful sale, potentially leading to a higher purchase price. We'll set your value range expectation and only reach out to serious buyers - allowing for negotiations at every step. 
• Find the perfect buyer: We'll connect you with strategic partners who share your vision and values, ensuring a seamless transition for your team and clients.
• Navigate the complexities: We'll handle negotiations, paperwork, legal team communications, and due diligence, so you can focus on successfully operating and growing your veterinary hospital through the sale. We know the common risks and pitfalls of the M&A process, and we'll work diligently to avoid those throughout.

A Personalized Approach to Your Success

We believe in building genuine relationships with our clients. Our team, led by veterinary industry veteran Gary Behler, has a deep understanding of the veterinary landscape. We'll take the time to understand your unique goals and tailor our services accordingly.

Here's what you can expect when you partner with Evergreen M&A:

• Constant communication: We'll keep you informed throughout the process, addressing any questions or concerns promptly.
• Expert guidance: Our team has extensive experience in veterinary practice sales through the full process of mergers and acquisitions.
• Streamlined process: We'll handle the heavy lifting, allowing you to focus on what matters most – your patients and your team.
• Confidentiality: We understand the sensitive nature of your business and will treat your information with the utmost discretion.

The Complete Guide to Selling Your Veterinary Practice

We'll expand upon each of these points below, so keep reading! Here is the step-by-step process on how to sell a veterinary practice. 

Step 1: Evaluate your options
Step 2: Build your all-star team
Step 3: Prepare your practice for peak performance
Step 4: Match you with the ideal buyer
Step 5: Seal the deal with confidence

Step 1: Evaluating your options 

This is a critical first step, and understanding your options is key. The most common concern that we hear from practice owners is if they should sell and why now. Further, you may want to know how much your practice is worth, how the market is impacting offers, and the types of buyers who are actively purchasing hospitals. 

Factors to Consider:

• Your Career Timeline: Approaching retirement within the next 1-5 years? Starting the sales process now ensures a smooth transition for your team and clients, as some buyers may require a post-sale commitment from you. Are you looking to maintain an active role in the practice or maybe even in corporate group leadership? There are so many opportunities available to you. 
• Market Conditions: The veterinary practice sales market is regaining momentum, though peak offer multiples have come down slightly. This means you can still receive a significant offer, even if retirement isn't your immediate plan. We are finding that the current economy and interest rates are having no to minimal impact on offers. 

Benefits of Selling Now:

• Maximize Your Value: The current market offers a great opportunity to capitalize on the value you've built in your practice. We are seeing multiples typically in the 6-9x range with potential for more depending on the size of your practice. Further, many buyers are close to recapitalizations and their next exits, offer lucrative financial returns for equity options when you sell. 
• Reduce Staffing Stress: The veterinarian shortage remains an issue for many owners. Most buyers have robust recruiting strategies and resources, alleviating some of the industry-wide staffing burden. We'll help you pick a partner that will enhance the services your clinic is able to provide and grow your team. 
• Focus on Your Passion: Post-sale, you can continue practicing while having more time and resources to prioritize patient care. You can also work less hours or improve your work life balance to take more vacations or spend time with your family. 
• Financial Security & New Opportunities: The sale brings financial security and opens doors for future endeavors, such as consulting, teaching, or even joining a corporate group on their leadership team. 

What is your practice worth? 

Operating Groups base their offers to purchase veterinary practices primarily on multiples of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) combined with practice size and growth potential. In 2021, offers peaked at multiples of 16 to 20 times EBITDA for practices with at least three veterinarians. Due to the consolidation of groups and their shifting focus back on their operations and hiring, offers have fallen considerably. Additionally, many operating groups are consolidating themselves, which is leading to less competition when bidding on a particular practice. We are now seeing offers for larger practices at 10x plus times EBITDA and offers for smaller practices at around 6-9 times EBITDA. While the market is still strong, offers likely won’t return to the levels we saw a couple of years ago and will likely level out and even decrease slightly. So even if you are not ready to plan your exit, retirement, or next move just yet, you can still receive a great, multi-million dollar offer for your hospital (depending on its size) and continue to provide care and mentorship in your facility.

Our President, Gary Behler can review your financials and provide a valuation range which will help inform your decision. To get started with that, you can reserve time directly on his calendar here or email him: gary@evergreenforfounders.com.

Step 2: Build your all-star team

Assembling the right team is crucial for a stress-free and successful sale. Here's who you'll want on your side:

1. Your Trusted M&A Advisor:

Think of them as your quarterback, guiding the entire sales process. An experienced advisor like Evergreen M&A can navigate negotiations, secure the best offer, and ensure the right fit for your practice. You'll benefit from our expertise, just like a recent client who went from few initial offers to receiving three strong options (more than double the initial value!) after partnering with us. We go beyond the numbers, finding a buyer whose culture aligns perfectly with yours.

2. Legal Muscle: An M&A Attorney

Mergers and acquisitions involve complex legal jargon and a mountain of paperwork. An M&A attorney acts as your legal champion, ensuring all documents are in order and protecting your interests throughout the sale. We have a network of trusted legal professionals and can connect you with the right lawyer for your specific needs.

3. Your Financial Guru: A Wealth Management Advisor

Selling your practice will likely bring a significant financial windfall. A wealth management advisor steps in to help you navigate the post-sale landscape. They'll create a personalized financial plan (including tax planning, estate planning, and investment strategies) to ensure your newfound wealth is managed effectively for the future.

Step 3: Prepare your practice for peak performance

Now that your dream team is assembled, let's get your practice shining for potential buyers!

1. Financial Reports:

• Gather Your Documents: We'll work with you to collect key financial records, including P&L statements and real estate information, ensuring a smooth and accurate picture of your practice's health.
• Expert Valuation & Financial Modeling: Evergreen M&A goes beyond basic valuations. Our team creates a sophisticated financial model showcasing your practice's profitability and exciting growth potential. This transparency translates into consistent, higher offers from buyers who understand your true value.

2. Optimizing for Success:

• Boosting Profitability: Our expertise extends to operational efficiency. We can identify areas to potentially reduce COGS (cost of goods sold) or other improvements, maximizing your practice's financial appeal, increasing EBITDA, which will increase the overall offer amounts. 
• Practice Presentation: Together, we'll identify enhancements to your physical practice and website, ensuring a professional and inviting first impression for potential buyers.

3. Finding the Perfect Match:

Once your practice is prepped and polished, we'll strategically market it to buyers who align with your vision and goals. This targeted approach ensures a smooth transition and a future that reflects your values.

Step 4: Match you with the ideal buyer

Selecting the right buyer is paramount. Here's how Evergreen M&A ensures a perfect match:

• Quality, Not Quantity:
  We curate a select group of serious buyers who are a strong fit for your practice. Forget mass marketing – we focus on targeted introductions with buyers whose culture, mission, and operating style align with yours.
• Deep Dives & Informed Decisions:
  Before introductions, we meticulously research each buyer if we don't already know them (and many we do know intimately from our experience working for a private-equity supported veterinary consolidator). Their history, integration process, and overall approach are all under the microscope, ensuring a smooth transition for your team and clients. What are their plans for growth and how can they support your own goals are all factors we consider. 
• Collaborative Negotiations & Transparency:
  We work hand-in-hand with you to review and negotiate key terms of each offer. Our expert guidance ensures you understand the nuances of each proposal and can make informed decisions.
• Finding the Sweet Spot:
  Price is important, but it's not everything. We help you identify the offer that delivers the best overall package – a strong financial return, a seamless integration plan, and a buyer who shares your values.
• Negotiating Powerhouse:
  Our team is in your corner, negotiating with buyers to secure the absolute highest offer with agreeable terms. You deserve the best possible outcome, and we'll fight for it.

Ultimately, you should feel confident and comfortable with your chosen buyer. With Evergreen M&A by your side, you can find the perfect partner who values your legacy and ensures a bright future for your practice.

Step 5: Seal the deal with confidence

Evergreen M&A meticulously manages every aspect of the closing process, ensuring a smooth and successful transaction:

• Offer Review & Selection: We'll work closely with you and your legal team to meticulously evaluate all offers. Together, you'll select the buyer who presents the best overall fit, price, and terms for your practice.
• Streamlined Deal Management: Our team leads the way, creating a data room to organize and share all necessary documents. We'll facilitate meetings with legal teams and meticulously document key agreements, ensuring a clear and efficient path to closing.
• Pre-Sale Integration Planning: We'll collaborate with you and the buyer to establish a seamless integration plan, minimizing disruption for your staff and clients. This proactive approach ensures a smooth transition for everyone involved.
• Closing, Funding, & Post-Sale Support: From finalizing the sale to securing funding, we'll be there every step of the way. We'll also provide ongoing support to facilitate a smooth post-closing transition.

Communicating with Your Staff:

Once a Letter of Intent (LOI) is accepted, it's time to inform your staff. Transparency is key. We recommend an open and honest conversation during a staff meeting followed soon after with a meeting from key personnel from the buyer outlining the plans for the future. Our experience allows us to guide you through crafting the message and delivering it effectively.

A Smooth Sale Awaits

Selling your veterinary practice can be a rewarding experience despite being a massive undertaking. Evergreen M&A is here to ensure we reduce the stress and maximize your return while finding the perfect buyer for your practice.

Ready to take the next step? Contact us today! We'll be happy to answer any questions and help you navigate the path to a successful sale. While a formal appraisal is recommended, we can provide you with an initial estimate of your practice's worth and a valuation range. 

To schedule your introductory call, you can reserve directly on Gary's calendar here, email him at gary@evergreenforfounders.com or complete the form below.