Is Your Veterinary Practice a Corporate Consolidator Candidate?
In the growing community of corporate veterinary hospitals we often get asked what they are looking for in acquisitions. Many of these entities are targeting practices with a specific EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization.
This is different than the traditional view of financials involving the private sector. EBITDA measures a company’s operating performance without having to factor in outside influences.
This strategy focuses on the outcome of operating decisions and excludes non operating decisions such as interest expenses (financing decision), tax rates (government decision), or non cash items like depreciation and amortization (accounting decisions). These numbers can be calculated using your income statements.
Other items influencing consolidators are demographics, cashflow, size, and profit. These entities are looking for 2+ doctor practices in desirable areas that are still growing. Ideally the seller would be willing to provide a transition period of 2-5 years. The consolidator will assume responsibilities for HR, payroll, and business management. This allows you to focus on patient care, while the consolidator uses their resources to grow the business.
If you think you might have a practice that meets these expectations, please contact your local Total Practice Solutions Group representative. We have experience dealing with corporate consolidators and can walk you through the process. It’s your retirement and every dollar matters!
Total Practice Solutions Group
P.O. Box 12483
Denver, CO 80212