Beyond financial performance, buyers and their advisory teams will dig deeply into the following areas when analyzing any veterinary practice M&A transaction. In the preparatory phase, Calder will work with you to document, highlight, and explain these areas of the practice and get prepared for intense buyer scrutiny.

Client relationships: Buyers will need to gain a deep understanding of the target veterinary practice’s client relationships. Buyers will assess the client base, loyalty programs, referral sources, and any exclusive or strategic partnerships that contribute to the effectiveness of the client relationship management.

Supplier relationships: Buyers will assess the strength of supplier partnerships, contractual agreements, pricing arrangements, and potential risks related to the availability, reliability, or cost of veterinary supplies and medications.

Customer base and contracts: Buyers will want to understand the target veterinary practice’s customer base, key accounts, and contract relationships. Factors such as customer concentration, contract terms and duration, customer satisfaction levels, and any potential risks related to client retention or loss will be carefully evaluated.

Inventory management: Assessing the target veterinary practice’s inventory management practices is important. Buyers will evaluate factors such as inventory turnover, product mix, storage capabilities, obsolescence risk, and any potential improvements or cost-saving opportunities in inventory management of medical supplies and pharmaceuticals.

IT systems and technology: Buyers will evaluate and assess the effectiveness and scalability of IT systems, practice management software, patient record systems, e-commerce capabilities, and any potential integration challenges with the acquiring company's IT systems.

Regulatory compliance: Veterinary practices are subject to various regulations, such as veterinary medical board requirements, controlled substance regulations, and health and safety standards. It is important for buyers to assess the target practice’s compliance with these regulations to identify any potential liabilities or risks associated with non-compliance.

Clinic facilities and logistics: Understanding the target veterinary practice’s facilities and logistical capabilities is a key priority for a potential buyer. Buyers will evaluate factors such as clinic efficiency, transportation management for mobile services, equipment quality, and any potential opportunities for optimization or cost reduction in clinic operations.

Market and competitive landscape: Buyers will assess the target veterinary practice’s position within the market and understand the competitive landscape. They will evaluate market trends, competitive advantages, potential threats, and opportunities for growth or diversification in the veterinary sector.

There are a few reasons why vet businesses do not sell, and Calder has worked diligently to eliminate these primary obstacles to selling.

The number one reason that veterinary businesses do not sell is because there is a significant gap between what the seller wants and what the market provides in terms of valuation. Calder eliminates this by conducting a thorough “market-informed” business valuation before we ever ask for a client engagement. Because we have sold 50+ businesses every year, we have an accurate pulse on valuation multiples, deal structure, and the state of the buyer pool. We combine our proprietary on-market data and insights with thorough research utilizing trusted valuation resources for businesses that match your specific niche and financial performance. The result is a precision valuation analysis that reflects the market feedback you will receive from buyers if you decide to proceed with a sale process.

At this point, it is 100% up to you whether to move forward with a sale process. If the valuation is not where you need or want it to be, Calder can point you to resources that can help you to improve your valuation or we can all simply wait. Sometimes, vet practice business owners decide to wait 1-2 years before selling once they understand what drives valuation. At no point during our initial valuation process will you feel compelled to make a decision that is not in your best interest. Calder Capital is in it for the long game, and this means standing shoulder-to-shoulder with our prospects and clients and helping them to make the best decision for their businesses and lives.

The second reason that veterinary businesses do not sell is the quality of their financial records. When buyers and lenders are making critical decisions to pay and loan, respectively, millions of dollars, it is critically important to them that they can trust the information that they are receiving from the seller. Periodically, we receive information from veterinary business owners that contains errors or is not prepared to the accounting standards that buyers expect. During our business valuation exercise, if we identify areas where buyers are likely to be confused or have questions, or we encounter impasses with respect to obtaining the types of financial records that buyers and lenders will expect during the analysis and due diligence phase, we will discuss these with you and help you work with your CPA or other accounting advisors to prepare the business appropriately for the type of scrutiny that a sophisticated buyer will bring.