Do you use an accountant to complete your tax returns? How about a financial planner to advise your investments and help you plan for retirement? A real estate agent to sell your house? A veterinary surgeon to perform surgery on your pet? The list goes on. In each of these situations, the accountant, financial planner, real estate agent, and surgeon, each have years of experience and expertise in their respective specialties. You seek out these professionals because you know you aren’t equipped to do the job yourself and you’re sure they can get the job done well.
The same mindset goes for selling your veterinary practice: partnering with a broker is the factor that can make or break your deal. For many practice owners, selling their business is the largest and most important financial transaction of their lifetime. Your practice deserves a deal that’s truly reflective of the time and effort you’ve spent growing and building it, and brokers can help you get there. But buyers count on practice owners to attempt a “Do-It-Yourself” sale without professional guidance, and their buyer’s salespeople will assure you that you are getting a good deal (but you aren’t)!! Some sellers soon realize that they’re in over their head and seek help while other just lose precious value by selling on their own. An experienced veterinary broker not only creates a bidding process to maximize value, but also ensures the deal is customized to meet your financial and practice goals.
Some background: it’s no secret that the veterinary industry has rapidly evolved over the last decade. Before 2017, only small, one or two-DVM practices were sold by brokers who helped find other veterinarians to buy them. Over the last seven years, more of the larger practices are sold by brokers directly to corporate groups. Even bad brokers (and they are out there!) can help you achieve a higher valuation than the DIY approach that we see all too often.
At Ackerman Group, we start with where you want to end up: your goals over the next three to five years, and then help you negotiate a deal that aligns with your future and secures the best price, terms, and cultural fit. Some of the key issues and terms we help you navigate include:
- Add Backs: Presenting all the add-backs to EBITDA (profits) before going to market, so that all buyers have the same starting point with your actual EBITDA level.
- Practice Upside: We work with you to clearly communicate your practice’s growth potential to buyers. Our team does this by thoroughly evaluating your practice and monitoring what the different buyers value at given points in time.
- TopCo Equity: Most offers today include a material, pre-tax investment in the buyer’s parent company equity. We evaluate the different companies’ investment prospects and timing of their recapitalizations—something not easy to assess with the lack of access and information available.
- Earnout: We help negotiate earnouts when practice performance warrants it. Our team knows how and when these incentives are appropriate, and we have deep experience negotiating terms with buyers.
- Co-Ownership: Should I enter a joint venture or 100 percent sale? We’ll help you weigh the pros and cons of each and put you on the best path. If you decide to co-own with a buyer, we’ll ensure you’re protected when you sell your ownership and have certain defined exit pricing and key decision rights.
- Real Estate: We negotiate major lease terms to maximize your real estate value while helping you decide your plan for the long-term. This may include holding the real estate, selling it and paying taxes today, contributing the real estate on a tax deferred basis into a REIT, conducting a 1031 exchange, and other strategies.
- Associate DVM Needs and Opportunities: We understand the market for key Associate DVMs, and we work to make sure the buyer provides these employees with the appropriate incentives as a necessity to complete the transaction.
- Tax Strategy: Our team works with you and your tax advisor on tax minimization strategies to assure both federal and state taxes are reduced as much as possible.
- Exit Timing: We integrate your desired exit timing and Topco Equity/JV timing with the natural timeline associated with a specific company.
We have helped sell over 160 hospitals since 2020 for over $1 Billion in combined transaction value. On average, Ackerman Group closed about one deal each week since 2020, equipping our team with continuous, relevant experience and market insights. Ackerman Group knows the buyers, pricing, and terms that can help you reach the deal you want for your practice and for your future. We understand the corporate market better than any other broker and we can secure a deal for you that is customized and priced to your maximum benefit.
Why Choose Ackerman Group?
How is Ackerman Group different from other brokers or doing it yourself? Our goal is to help you get to where you want to be by customizing a deal that a) allows you to achieve your three-to-five-year plans, b) creates financial security for you into retirement, and c) ensures continuity at the practice level. We take the responsibility of guiding you through the complex transition process very seriously; our team generates valuable financial outcomes for you along with a unique education about the process.
- Our financial analysis expertise drives better profit or EBITDA numbers than the DIY approach, your CPA, or the buyer completing the analysis. (Note: Buyers trust our numbers. We do this for more than 60 deals a year and know what the market will accept for add-backs).
- Our strong negotiating experience and skills produce better, highly customized deals. Our team studies the market intimately and we’re familiar with what can be negotiated among the different consolidators.
- Our experience in structuring transactions yields financial benefits for your Associates and staff, so that they may have peace of mind and confidence in the new buyer and what’s to come.
- We routinely integrate with your CPA, financial advisor, and trust/estates attorney to craft a transaction that aligns with your tax, financial, and estate planning. Most of your advisors will need guidance on exactly what is occurring in your transaction, and we’re happy to help.
Every practice is different and requires a plan tailored to you and your business’s needs. Our goal is to secure you a customized deal, with better financial results than what you could’ve obtained on your own, while integrating with your business and personal planning.