The market for veterinary practices in Missouri is robust, with corporate buyers and private equity firms driving demand and offering strong valuations. For practice owners, this presents a significant opportunity. However, navigating the sale process requires careful preparation, from understanding your practice’s true worth to complying with state-specific laws. A successful sale is about achieving financial goals while protecting your legacy. This guide provides insights into the current landscape.
The Missouri Veterinary Market at a Glance
The veterinary industry is experiencing a wave of investment, and Missouri is no exception. This trend, often called corporatization, has fundamentally changed the landscape for practice owners considering a sale.
The Rise of Corporate Buyers
Large corporations and private equity groups are drawn to the veterinary sector’s stability and growth, driven by increased pet ownership and reliable, cash-based revenue. Between 2017 and 2022, private equity firms invested an estimated $45 billion into the industry. Today, some estimates suggest that corporate entities own up to half of all general veterinary practices. For a Missouri practice owner, this means there is a large and well-funded pool of potential buyers actively looking for acquisition opportunities. This high demand is a primary driver of the strong practice valuations we see today.
What to Know Before You Sell in Missouri
Selling your practice involves more than just financials. In Missouri, specific legal and operational factors demand attention. The state requires that any ownership structure, including a corporate one, must guarantee that a licensed veterinarian retains full control over all medical decisions. Your business’s organizing documents must clearly state this.
Furthermore, a change in ownership requires a new facility permit from the Missouri Veterinary Medical Board, a process that includes a self-inspection and a review of your ownership structure. Beyond compliance, you should consider the human element. Your staff will have questions about a new owner’s culture and operational style. Addressing these concerns proactively is a key part of a smooth transition and protecting the legacy you’ve built.
Current Market Activity & Valuations
The high level of interest in veterinary practices translates directly into strong market activity and attractive valuation multiples for sellers. Here’s what we are seeing.
Valuation Multiples
Buyers, particularly corporate groups, typically value practices based on a multiple of Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Currently, healthy practices can expect offers in the range of 8 to 13 times EBITDA. Practices with exceptionally high-profit margins, often above 18%, may command even higher multiples. While smaller or more rural practices may see offers closer to 4 to 5 times EBITDA, strategic positioning can significantly improve that figure.
Activity in Missouri
You don’t have to look far to see this trend in action. CareVet, a major veterinary network based in Clayton, Missouri, has acquired over 100 practices since 2018. This is a clear indicator of the active and competitive acquisition environment within the state.
Understanding the Sale Process
A successful practice sale is a structured process, not a single event. It begins long before you list your practice. The first step we always advise is a comprehensive valuation to understand your practice’s true market worth. From there, we create a confidential marketing strategy to identify and approach the right potential buyers without alerting your staff or competition.
Once interest is established, you will receive initial offers. After selecting a partner, the most critical phase begins: due diligence. This is an intense review of your financials, operations, and legal compliance. Many deals encounter challenges here if not properly prepared for. A well-managed process anticipates these hurdles, leading to a smoother negotiation, a definitive agreement, and finally, a successful closing.
How Your Veterinary Practice is Valued
Your practice’s value is more than just its revenue. Sophisticated buyers look at its profitability and risk profile, which is captured in a two-part formula: Adjusted EBITDA x a Valuation Multiple.
Adjusted EBITDA starts with your net profit and adds back interest, taxes, depreciation, and amortization. We then “normalize” it by adding back personal or one-time expenses (like a vehicle lease) and adjusting the owner’s salary to a fair market rate. This reveals the true cash flow of the business. That figure is then multiplied by a number that reflects your practice’s quality and future potential.
Several factors influence your multiple:
| Key Valuation Factor | Impact on Multiple | Why It Matters to a Buyer |
|---|---|---|
| High Profitability (EBITDA > 18%) | Increases Multiple | Signals an efficient, well-run operation. |
| Multiple Veterinarians | Increases Multiple | Lowers risk by not relying on a single person. |
| Modern Equipment & Facility | Increases Multiple | Reduces the buyer’s need for future investment. |
| Strong Client Loyalty | Increases Multiple | Indicates a stable and recurring revenue base. |
Planning for Life After the Sale
The final contract is signed, but the transition is just beginning. What happens next depends heavily on the planning you do before the sale. It’s important to ask yourself what you want your future role to be. Do you want a clean exit, or would you prefer to continue working for a few years, perhaps with less management responsibility?
Your choice of buyer will have a major impact on your staff and the culture you have built. Some buyers are focused on preserving the local practice’s identity, while others may integrate it more deeply into a corporate structure. Finding the right partner isn’t just about the highest price. It is about finding a steward for your legacy who will care for your team and clients. We help you negotiate these terms, ensuring the transition aligns with your personal and professional goals.
Frequently Asked Questions
What is the current market trend for veterinary practices in Missouri?
The Missouri veterinary market is experiencing strong demand from corporate buyers and private equity firms due to increased pet ownership and stable cash-based revenue. This has led to robust valuations and active acquisition activity, especially with groups like CareVet acquiring over 100 practices since 2018.
What legal requirements must be met when selling a veterinary practice in Missouri?
Missouri law requires that a licensed veterinarian retain full control over all medical decisions in any ownership structure. Additionally, a change in ownership requires a new facility permit from the Missouri Veterinary Medical Board, including a self-inspection and review of ownership documents.
How are veterinary practices valued in Missouri?
Practices are typically valued based on a multiple of Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Valuation multiples generally range from 8 to 13 times EBITDA for healthy practices, potentially higher for those with over 18% profit margins.
What factors influence the valuation multiple of a Missouri veterinary practice?
Key valuation factors include: * High profitability (EBITDA > 18%) which increases the multiple; * Having multiple veterinarians lowers risk and raises the multiple; * Modern equipment and facilities reduce future investment needs; * Strong client loyalty indicates stable recurring revenue, positively impacting valuation.
What should owners consider about their role and staff when planning the sale?
Owners should decide if they want a clean exit or to remain in a reduced role post-sale. The choice of buyer affects staff and practice culture, as some buyers preserve local identity while others integrate into corporate structures. It’s crucial to find a buyer who respects your legacy and supports your team.