The New Hampshire veterinary market presents a significant opportunity for practice owners considering a sale. High pet ownership rates and strong per-capita spending create a robust demand for services, attracting both private and corporate buyers. This guide provides a look into the current market dynamics, valuation trends, and key legal considerations specific to the Granite State, helping you understand the path to a successful and profitable practice transition.
Market Overview
New Hampshire is a prime location for veterinary medicine. The demand here is not just perceived; it is proven by data. Over half of all households (51.8%) own a pet, one of the highest rates in the nation. This drives high per capita spending on clinical services, with New Hampshire residents spending an average of $94 per person, second only to Vermont in New England. While national trends show a slight decrease in patient visits, overall practice revenue has continued to climb, increasing by 6.0% year-over-year. This unique environment, a combination of dedicated pet owners and strong economic fundamentals, makes New Hampshire veterinary practices highly attractive to a wide range of buyers.
Key Considerations for Sellers
Before you list your practice, you must consider the structure of your sale. This decision has major implications for your finances, legacy, and post-sale life. Your path will largely depend on your practice’s size and your personal goals.
Private Sale vs. Corporate Affiliation
A private sale to an associate or another independent veterinarian is a common path, especially for practices grossing between $800,000 and $1.5 million. This route often offers more control over the transition. For larger practices, typically those grossing over $1.5 million with multiple DVMs, a corporate sale becomes a more lucrative option. Corporate buyers often pay higher multiples but may require the selling owner to remain for a period of two to three years.
New Hampshire’s Ownership Laws
A critical factor in New Hampshire is that state law prohibits a non-veterinary-owned corporation from directly “practicing veterinary medicine.” This does not stop corporate sales. Instead, it means transactions are structured through a Management Services Organization (MSO). The MSO handles the business operations while the clinical practice remains veterinarian-owned. This is a complex legal structure, and navigating it correctly is vital to a successful and compliant sale.
Every practice sale has unique considerations that require personalized guidance.
Market Activity and Valuations
The current market is defined by high demand and soaring valuations. Just a few years ago, a profitable practice might sell for 5-6 times its profit. Today, corporate buyers are paying multiples of 8-13 times adjusted profit (EBITDA) for attractive practices. To put that in perspective, a practice with $500,000 in adjusted profit could command a valuation of around $6 million in today’s market. This shift has created a seller’s market. Right now, there are several veterinary hospitals on the market in New Hampshire, with annual collections ranging from under $500,000 to over $2 million. Some are explicitly seeking the premium valuations that come with corporate affiliation. This activity signals a healthy, competitive environment for owners who are prepared to sell.
The Sale Process
Selling your practice is a multi-stage process that rewards careful preparation. Buyers pay for proven performance, not just potential, so starting this process one to two years before you plan to sell is ideal. Here is a simplified look at the road ahead.
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Preparation and Housekeeping. This first step involves gathering your financial statements, reviewing your operations, and understanding your practice’s key metrics. This is the time to clean up your books and fix any operational inefficiencies to present the business in the best possible light.
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Professional Valuation. You need to know what your practice is worth. An objective, third-party valuation is the foundation of your entire strategy. It establishes a credible asking price and informs your negotiation strategy.
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Confidential Marketing. An advisor can discreetly market your practice to a vetted pool of qualified buyers. This maintains confidentiality while creating a competitive environment to drive up the price and improve terms.
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Negotiation and Due Diligence. After accepting an offer, you enter the due diligence phase. The buyer will perform a deep dive into your financials, operations, and legal standing. This is where many deals face challenges, making professional support critical.
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Closing and Transition. The final stage involves signing the legal documents, transferring funds, and beginning the transition to the new owner.
Understanding Your Practice’s Value
A formal valuation is more than a simple calculation. It is about telling the financial story of your practice. Buyers value businesses based on a multiple of their Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is not just the profit on your tax return. It is a normalized figure that adds back owner-specific perks and non-recurring expenses to show the true cash flow available to a new owner. The multiple applied to that EBITDA depends on your buyer. As you can see, the difference is significant.
| Sale Type | Typical Multiple Range | Example Valuation ($500K Adjusted EBITDA) |
|---|---|---|
| Private Sale | 4x – 6x | $2,000,000 – $3,000,000 |
| Corporate Sale | 8x – 14x | $4,000,000 – $7,000,000 |
An experienced advisor’s role is not just to find a buyer, but to first help maximize your Adjusted EBITDA and then create a competitive process that pushes the valuation multiple to the higher end of the range.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Planning for Life After the Sale
The day you close the deal is not the end of the story. A successful transition requires planning for what comes next for you, your team, and your legacy. The structure of your deal will define your future.
Your Role After Closing
In a corporate sale, you are rarely handed a check as you walk out the door. Most deals require the selling owner to continue working for two to three years. This ensures a smooth transition for staff and clients. Your compensation, responsibilities, and schedule during this period are all key points to be negotiated as part of the sale.
Structuring Your Payout
Your proceeds may also be structured in different ways. A portion might be an “earnout,” paid only if the practice hits certain performance targets after the sale. You may also be offered “rollover equity,” where you retain a minority ownership stake in the new, larger company. This provides a potential second payout when the larger entity is sold again, but it requires careful evaluation of the risks and rewards. Planning for these elements is critical for protecting your financial future.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What factors make New Hampshire’s veterinary market attractive for selling a practice?
New Hampshire has a high pet ownership rate of 51.8% and strong per capita spending of $94 on clinical services, second highest in New England. Despite some national trends showing decreased visits, overall practice revenue in NH is climbing, creating strong demand and attractive market conditions for sellers.
What are the typical differences between a private sale and a corporate sale of a veterinary practice in New Hampshire?
Private sales, common for practices grossing $800K-$1.5M, often give owners more control over transition. Corporate sales, typical for larger practices over $1.5M gross with multiple vets, usually offer higher valuation multiples (8x-14x EBITDA) but often require the owner to stay on for 2-3 years during transition.
How does New Hampshire law affect corporate ownership of veterinary practices?
NH law prohibits non-veterinary-owned corporations from directly practicing veterinary medicine. Corporate sales must be structured via Management Services Organizations (MSOs), where the MSO manages business operations but the clinical practice remains veterinarian-owned. Navigating this structure correctly is essential for compliance.
What valuation multiples can sellers expect in New Hampshire’s current veterinary practice market?
Private sales typically range from 4x to 6x adjusted EBITDA, equating roughly to $2-$3 million for a $500K profit practice. Corporate buyers pay significantly higher multiples from 8x to 14x, representing $4-$7 million valuations for the same profit level, reflecting a strong seller’s market.
What are the key stages in the process of selling a veterinary practice in New Hampshire?
The sale process includes: (1) preparation and housekeeping to clean financials and operations, (2) professional valuation to set asking price, (3) confidential marketing to attract qualified buyers, (4) negotiation and due diligence where the buyer reviews detailed practice info, and (5) closing and transition involving legal/document signings and handing over the business.
