9 Vet Practice with $5.8 Million in Sales
Owners will hold equity of up to 20%!
The twenty-four professionals make up this Alberta-based vet clinic team, including nine DVMs as well as six techs, two assistants, and seven administrators. The practice has been in the area since 1988 and clients travel from within 100km for services. The state-of-the-art facility is truly designed to meet the needs of the practice and includes several exam rooms, 2 surgical suites, in-house lab, private offices, and indoor animal housing. All of the owners are full time DVM’s and want to stay on for the next owner. Their salaries are accounted for in the cash flow shown.
This team cares for both large (50%) and small (50%) animals brought to them by a diversified client base that includes pet owners to large-scale dairy operations. An overview of services includes general care, surgery, reproductive care, production management, lab services, dental care, and a full pharmacy. The owners are planning to remain a part of the highly-skilled team, maintaining institutional knowledge and service continuity.
The sellers have put in over $500K to the current location. The space was also designed with a generous reception and retail area, private offices, pharmacy, as well as runs and kennels. A team of seven veterinarians work at the clinic and on-site services are provided within an 80km/50mi radius of the business.
Main revenue streams include large animal pharmaceuticals and vaccinations, small animal retail, and equine vaccinations. The number of small animal clients continues to grow, and equine services are also trending upward. There is plenty of room within the facility to increase business without renovation.
- Year Established: 1988
- Location: Alberta, Canada
- Service Area: 100km/62mi radius of the two clinics
- Clients: Pet owners, local farmers, corporate farms
- Services: General, surgical, and reproductive care for large animals (50%) and small animals (50%)
- Building: Large state-of-the-art facility custom designed to suit the practice perfectly. Location includes several exam rooms, 2 surgical suites, in-house lab, private offices, indoor animal housing
- Reason for Selling: Industry Consolidation
- Employees: 24: 9 vets, 6 techs, 2 assistants, 4.5 administration, 1 office manager, 1 inventory manager
- Seller Training Period: The owners will stay on (accounted for in the cash flow)
- Growth Opportunities: Expand equine services, build upon small animal retail sales
- Current Owner’s Responsibilities: All are full-time veterinarians and will stay on (accounted for in the cash flow)
- List Price: $4,900,000 CAD
- Gross Sales:
- TTM: $5,892,861
- 2018: $3,148,682
- Cash Flow:
- TTM: $959,519
- 2018: $869,537
- Assets Included in Purchase*
- Equipment: $600,000+: Cutting edge technology, two full surgical suites, in-house lab, digital x-ray
- Inventory: $300,000: Medical and operational supplies, pharmacy, retail
- Average A/R: $300,00
- Intangible Assets: Shining reputation, excellent social media reviews, innovative approach, experienced staff, institutional knowledge will remain intact
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement|
TTM October 18 - September 19
January - September
|P&L Statement||P&L Statement||P&L Statement||P&L Statement||P&L Statement||Notes|
|Net Income Shown on Financial Statement||$1,059,623||$733,282||$1,018,458||$692,117||$841,638||$923,165||$846,407|
|Meals & Entertainment||$3,217||$2,419||$2,566||$1,769||$1,093||$1,196||$1,207|
|Replacement||$-236,104||$-177,078||$-236,104||$-177,078||$-236,104||$-236,104||$-236,104||To keep/replace owners|
|Seller's Cash Flow = Total Addbacks + Net Income||$959,519||$566,824||$869,537||$524,468||$700,537||$730,198||$656,024|
|Profit Margin||16.28 %||13.60 %||27.62 %||14.68 %||27.34 %||31.07 %||32.18 %|
- Continued growth year-over-year!
- Currency in CAD
Typical Clients and Services
- Pet owners
- Local farmers
- Includes 4-H animals
- Small-scale farmers
- Large-scale farmers
- Family and commercial farms
- Horse owners
Comprehensive services include evaluations and general care, herd management, reproductive care, vaccinations, surgery, lab services, dentistry, nutrition consultations, and emergency services.
- Comprehensive large animal care
- Comprehensive ruminant care
- Comprehensive small animal care
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Total Employees: 21
- 7 Veterinarians
- 6 Technicians
- 2 Assistants
- 6 Administrative staff
- Expand equine services
- Build upon small animal retail sales
- Increase small animal client base
- Continue momentum in pharmaceutical sales and vaccine administration
- Consider satellite location
The Firm Business Brokerage used a cash flow valuation methodology to determine the purchase price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, a TTM cash flow was used with a prescribed multiple is 5.5. With this information, the computation is as follows:
$959,519 x 5.5 = $5,277,355
The fair market value found above positions the business list price at $4,900,000 CAD.
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