If you’re looking to buy or sell your pet hospital or veterinarian practice, you’re probably wondering, “Why are veterinarians going corporate?” Keep reading to discover an insider’s view on selling to a corporate group and why an increasing number of veterinary clinics and private practices are realizing the benefits.
What Percentage of Veterinary Practices Are Corporate?
Veterinary practice acquisitions by corporations are higher than ever before. According to veterinary consultant Karen E. Felsted, roughly 25% of pet care facilities have corporate ownership, and some corporations own hundreds of practices.
Why Are There So Many Veterinary Corporations?
Why are veterinarians going corporate? Part of the reason involves the increase in pet ownership after the pandemic. According to a survey by YPulse, 76% of millennials now own pets, and they comprise the largest demographic of new pet owners since the COVID-19 lockdown. Even more importantly, millennials spend a lot of money on their dogs and cats, providing a prime opportunity for vets to make record profits, which corporate veterinary practices capitalize on.
Why Vet Clinics Are Getting Bought by Private Equity Firms
A few main reasons are leading to large corporations buying up veterinarian practices.
Higher Valuations
Veterinary practices are making higher profits than ever before, leading to higher valuations and more offers from corporations. Even before the pandemic, the veterinary business showed an impressive four to five percent growth. During the pandemic, the industry grew eight to 12%, a trend experts predict will last through 2023 and beyond.
Increased Spending
Almost half of households have at least one pet, and with an increasing number of adults choosing to have fewer or no children, pets are taking their place as part of the nuclear family. When you consider how much money the average family spends on their children, if pet owners spend only a fraction of that, it’s still a considerable amount.
In addition to spending more on things like obedience classes, doggy daycare, and premium food, millennials don’t skimp when their beloved pet is sick. According to the North American Pet Health Insurance Association, the number of pet owners that purchase insurance increased by 28% from 2020 to 2021 for a total of 4.4 million policies. When it comes to getting their pets the best medical care available, owners don’t cut corners.
Macroeconomics
The vet industry has always been resilient to a recession, but the low interest rates, slow but stable economic growth, and abundance of available capital during the pandemic helped the industry take off and increased corporate buyouts. While certain economic indicators are weakening in the years after the pandemic, the industry remains strong overall.
Find Your Exit With Total Practice Solutions Group
So, why are veterinarians going corporate? Because it’s a great way to set you and your family up for the future. Whether you’re interested in buying or selling a practice, Total Practice Solutions Group can help you with the entire process, from valuation to closing.
With over 100 years of combined experience and 5,000 transactions, we’re the best choice. To schedule a consultation, call 1-844-908-2967.