This solely owned multi-doc small animal practice had been established by the owner 8 years ago. The seller was a 52-year old female that wanted to retire and spend more time with her family.
The seller had combined business savvy with a widely known reputation in the community for selfless humanitarianism. This impressive combination made prospective buyers wonder if the practice would still succeed once the seller left immediately after the sale. Also, practice revenue had increased by 55% each year for the last 3 years. The practice that had produced $550K in revenue two years ago was now over $1.3M in revenue. The rapid revenue growth made the presentation of the veterinary practice value to interested parties very difficult to support. If the last three years of financials were considered for the valuation, it would not account for the recent growth and would force the owner to sell the veterinary practice 2 years later to get the real value.
Praxis proved that the practice was no longer the personality practice that it was a few years ago. Praxis highlighted the fact that the owner was actually producing only a minimal amount of the total revenue and that the three current associate veterinarians would provide plenty of coverage after the sale. Praxis proved that the recent success was a trend and not a fluke by showing that the practice had plenty of patients and was adding an additional 75 more per month. Praxis convinced prospective buyers to accept the veterinary practice valuation based solely on its most recent year due to the statistical support for sustained growth and the scalable infrastructure already in place.
The veterinary practice sold for $1.6M or 121% of revenue. The seller received 100% of the $1.6M sales price at closing and the entire process was completed in just over 4 months. Praxis worked with the seller to make sure that the allocation of the sales price left her with as much of the sales proceeds as possible after paying taxes. Praxis secured a 10-year triple net lease for $60,000 per year amounting to an additional $600,000 in rental income over the lease term. The seller stayed on long enough to ensure a smooth transition and then retired to spend more time with her family.