Get in Touch

Veterinary Practice EBITDA & Valuation Multiples – 2023 Report

Business
Vet Practice Multiples Tn

Our research team examined the state of valuation multiples for private veterinary practices entering into an M&A process as of Q3 2023. The study compiled M&A data from private equity networks, proprietary databases, and interviews with a range of valuation professionals. (Sources)

The results of our study are displayed in the tables below, which list EBITDA and revenue multiples for veterinary practices by industry subsector and level of earnings. 

EBITDA Multiples for Private Veterinary Practices, Q3 2023

Company Type EBITDA Range
$500k-1M $1-5M $5-10M
General Practice Veterinarians 5.4x 8.6x 11.5x
Emergency Clinics 5.2x 8x 10.5x
Exotic Animal Clinics 6.6x 10.1x 11.4x
Laboratory Clinics 6.7x 9.9x 11.9x
Livestock, Food, and Large Animal 6.2x 10.3x 12.1x
Veterinary Specialists 7.1x 11.1x 13.2x

Revenue Multiples for Private Veterinary Practices, Q3 2023

Company Type Revenue Range
$1-3M $3-10M $10-50M
General Practice Veterinarians 1.6x 2.2x 2.9x
Emergency Clinics 1.4x 2x 2.7x
Exotic Animal Clinics 2.3x 3x 3.4x
Laboratory Clinics 2.1x 2.7x 3.3x
Livestock, Food, and Large Animal 2x 2.5x 3.1x
Veterinary Specialists 2.4x 3.1x 3.6x

The following sections explain what business owners should expect when attempting to sell their veterinary practice over the next year, as well as break down the market factors driving our team’s expectations.

The Current State of Veterinary Practice M&A

Veterinary clinics have been steadily increasing in valuation over the last few years, which our team attributes to the following factors: 

  • Increased pet ownership during the pandemic has created more stable revenue stream for clinics
  • Financial buyers have been on a purchasing spree for smaller practices, driving up demand for strategic – and other financial – acquirers
  • Vet shortages in several areas of the US is increasing demand for available practices

The interest in veterinary practices from PE and other financial buyers stems from the near-record profits many practices are enjoying, which will likely continue for the next decade as pet owners continue to care for their “pandemic pets.” Veterinary practices have also proven to be resilient over the past few years, adapting to pandemic restrictions and overall experiencing relatively minor turbulence throughout the 2022 economic downturn. As a result, PE firms see small and midsize practices as a safe investment. This increased attention has driven up EBITDA multiples, as displayed in the graph below: 

Finally, despite the increase in pet ownership, the number of veterinary practices has remained relatively fixed, experiencing only minor growth in the last two years. Many areas in the US have a limited number of clinics to visit.

Looking towards 2024, our team has the following predictions: 

  • Valuations and multiples will rise, but the rate of growth will slow. With pet ownership at a near-record high, veterinary practices will likely see increased valuations. Increased demand is likely to spur the creation of many new practices, however, which will eat away at the rate of growth for existing clinics, meaning that 2024-2026 will likely be the optimal years to sell before the market is flooded.
  • Generalist practices will rise to meet specialty clinics. Historically, buyers appear to prefer specialty clinics (e.g. exotic animals, animal oncologists/pathologists) since they collect more revenue per visit and often retain a more stable clientele due to less competition. However, as more vets bring specialists onboard to justify increased fees, we expect that EBITDA multiples for general clinics will increase more quickly and all but catch up with specialty practices.
  • Areas with low/no competition are in a prime position to sell. While various specialties often sell for higher multiples than generalist clinics, practices that command a higher customer demand and consistent revenue stream—which is at a peak in areas with few clinics—typically achieve the highest payout. Practice owners in these areas who are represented by an M&A advisor tend to see the highest payouts. 

Read our rankings of the top M&A firms in the U.S.Selling Your Veterinary Practice

Selling any business is a complex process; ensuring that you are receiving the correct valuation for that business is even more difficult. As someone who has sold several businesses to private equity and strategic buyers, I can attest to the difficulty of the process.

If you’d like the advice of someone who’s been there before, I’m happy to offer my thoughts. You can reach me via the link below or through the contact page of this site.

Evan Bailyn

Evan Bailyn is a best-selling author and award-winning speaker on the subjects of SEO and thought leadership. Contact Evan here.