After joining the VetPrac education team last year, we are delighted to welcome Simon Palmer back this year to VetPrac workshops in Brisbane and Sydney. Simon runs workshops and seminars on exit planning and practice sales throughout Australia, and is the founder of Australia’s largest dental and vet brokerage – Practice Sale Search. His company sells more than 60 practices a year.
Last year Simon gave us some insight into practice sales and the role he plays in both practice sales and acquisitions.
With the growth of corporate veterinary practices, I asked Simon to tell us how this has had an impact on the sales process, and how corporate buyers perceive veterinary practices differently to owner operator buyers.
Simon has seen several impacts of corporate buyers; that of increased options, and increased prices.
“The appetite for practices with a justifiable price tag over $1M is thin amongst owner-operators. Corporate aggregators provide options for these practices. The laws of supply and demand tell us that when there is increased demand for any asset, the price for that asset is usually elevated. Corporate aggregators buying practices results in more demand for higher-profit/revenue vet practices. This, in turn, should mean that owners of these vet practices get more favourable options when it comes time to sell”
Simon, what are the differences that vets should be aware of when selling to a corporate group?
“There are two things that I think vets should keep in mind about corporate aggregators: Firstly, an owner operator buyer is looking for a business and a job. A vet corporate is just looking for a business. This is a fundamental difference in the way that the practices are looked at and assessed. A Vet buyer may pay more for qualities that don’t appear on a profit and loss. They may be willing to pay more for a recently renovated practice that has a well-designed work environment that is near to their home for example. A corporate aggregator is really just looking at production/revenue, profit and prospects for expansion.
Secondly, many vets have negative connotations in mind when they hear of “corporate buyers”. I believe that it is unfair to lump them all together and paint them with the same negative brush. There are many corporate aggregators in the veterinary world with different ways of acquiring, different corporate cultures and different relationships with their practices, vets and clients. If you are selling your practice, it is probably a good idea to speak with vet buyers that are individual owner operators AND corporate aggregators, so that you can get a feel for how both view and value your practice. It is always better to know all the options that are available to you, before you make any decisions.”
Thanks, Simon, for your insights into this rapidly expanding sector of veterinary practice sales.
If you are thinking about either buying or selling a veterinary practice, why not register for the Buyers and Seller’s workshops to get some great professional advice on the process. You wouldn’t expect a great result if you attempted a new surgical procedure without thorough training; why expect a great outcome if you try to buy or sell a practice without professional advice!
Simon Palmer can be contacted at: 1300 282 042 or firstname.lastname@example.org
Written by Alison Caiafa