Stage Road Animal Hospital was founded by James R. Pearce, DVM in 1974. Dr. Pearce has been caring for athletic dogs, Greyhounds and field trial dogs since 1974 providing them with canine ACL surgery. His special interest in orthopedics has allowed him the opportunity to do TTA surgery. Dr. Pearce has performed several thousand bone surgeries involving implants since 1974. The practice accepts referrals from veterinarians in Arkansas, Mississippi, as well as those who need dog ligament surgery in Tennessee.
The seller wanted to be relieved of practice management duties and relocate shortly after the sale. The seller wanted to maximize the sales price by creating competition through interest.
A failed sales attempt with another brokerage firm had shown that the declining demographics made the sale of the real estate impossible and the sale of the practice more difficult. The seller wanted to immediately relocate to another section of the country after the sale. This move would limit the seller’s time available to help the eventual buyer with the transition process. This solo practitioner was a "key man" risk because he produced more than 2 DVM's and performed unique procedures where clients would drive from all over to seek his services.
Praxis targeted corporate buyers who did not intend to work in the practice and were more interested in steady practice revenue than area demographics. Praxis knew that corporate buyers would view the seller as a key man risk and advised the seller to be willing to remain with the practice for a minimum of two years. A seller of a practice with multiple veterinarians might be allowed to relocate after as little as six months when selling to a corporate buyer, but not a solo practitioner.
Praxis also strongly recommended that the seller immediately hire an associate veterinarian. An associate was needed to ensure complete coverage, distribute the knowledge, and to allow the seller to cut back his hours. Praxis focused on buyers who were interested in leasing the building rather than buying.
Praxis attracted 4 offers to acquire the practice. The seller received 95% of the sales price at closing. The sales price was approximately 120% of revenue and the entire process was completed in less than 4 months. Praxis worked with the seller to make sure that the allocation of the sales price left him with as much of the sales proceeds as possible after paying taxes.
Praxis secured a 10-year triple net lease resulting in a steady cash flow for the seller. Although the buyer wanted the seller to stay on with the practice for 3 years after the sale, Praxis negotiated a 2-year employment agreement with a favorable work schedule due to the recent hiring of a new associate.
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