Acquiring a Veterinary Practice

The veterinary industry is experiencing rapid consolidation, driven by pet humanization trends, veterinarian retirement waves, and strong private equity interest. According to the American Pet Products Association (APPA), US pet spending exceeded $147 billion in 2023, with veterinary care and product sales representing the fastest-growing segment. For search fund entrepreneurs, veterinary practices offer recurring revenue, emotional customer loyalty, and a clear path to value creation through the same DSO-like model being applied in dental practices.

The opportunity is amplified by demographics: the AVMA estimates that over 40% of practice-owning veterinarians are over 55, and many lack a succession plan. Meanwhile, corporate consolidators like Mars Veterinary Health, NVA, and VetCor have acquired thousands of practices, proving the economics of multi-location platforms. Search fund operators can replicate this playbook at a smaller scale, acquiring one or two practices and building from there using a disciplined buy-and-build strategy.

• Pet economy growth: US pet spending exceeds $140B annually, with veterinary care the fastest-growing segment
• Recurring revenue: Annual wellness exams, vaccinations, dental cleanings, and chronic disease management
• Emotional loyalty: Pet owners develop deep loyalty to their vet, switching costs are high
• Fragmented market: 28,000+ veterinary practices in the US, ~25% corporately owned
• Succession crisis: Many practice-owning vets are nearing retirement with no succession plan
• Consolidation premium: Solo practices sell at 5-8x EBITDA; corporate platforms at 12-18x

• Veterinary Practice Act: Many states require a licensed veterinarian to own the practice. Research your state's rules.
• Management company model: Similar to the DSO model, a management company provides support services while a licensed vet retains clinical ownership
• Friendly states: Some states allow non-veterinarian ownership (varies widely)
• Partner with a vet: Many search fund operators partner with a licensed veterinarian who serves as medical director

• Revenue per DVM: Benchmark is $700K-1M per full-time veterinarian. Below $500K signals operational issues.
• Active client count: Clients with at least one visit in the trailing 18 months. Track trends.
• Average transaction value: Benchmark $200-400 per visit. Higher ATV indicates strong wellness plan adoption and good client communication.
• Staff retention: Veterinary technician turnover is a major industry challenge. High turnover = operational risk.
• Equipment: Digital X-ray, ultrasound, dental equipment, surgery suite. Major capex if outdated.
• Revenue mix: Wellness/preventive (30-40%), medical (30-40%), surgery (15-25%), retail (5-10%)

• Wellness plans: Monthly subscription plans for preventive care. Increases revenue predictability and client retention. Practices with wellness plans typically see 20-30% higher annual client spend.
• Extended hours: Evening and weekend hours to capture demand from working pet owners
• Specialty services: Add dentistry, dermatology, rehabilitation, or emergency services
• Digital marketing: Most vet practices have minimal online presence. Google Ads and SEO drive new client acquisition.
• Practice management software: Upgrade to modern PIMS (eVetPractice, Cornerstone, AVImark) for better efficiency and reporting
• Add-on acquisitions: Roll up nearby solo practices to build a multi-location platform
• Fee optimization: Many independent practices have not raised fees in years. A data-driven pricing review in the first 90 days can boost revenue 5-15% with minimal client attrition

Bain & Company estimates that the US veterinary services market will grow at 8-10% annually through 2030, driven by rising pet ownership, increased spending per pet, and the expansion of specialty and emergency services. This organic tailwind makes veterinary practices one of the more attractive industry verticals for ETA.

• Veterinary practices offer strong recurring revenue, emotional customer loyalty, and significant consolidation opportunity
• Check your state's Veterinary Practice Act, non-vet ownership may require a management company structure
• Key DD metrics: revenue per DVM ($700K+ target), active client trends, staff retention, and average transaction value
• Wellness plans are the single highest-impact post-acquisition initiative for revenue predictability
• Consolidation premium is substantial: solo at 5-8x EBITDA, platforms at 12-18x

It depends on the state. Many states require a licensed veterinarian to hold the practice license, but non-vet ownership is permitted through a management company (management services organization or MSO) model, similar to the dental DSO structure. In this arrangement, a management entity handles billing, marketing, HR, and operations while a licensed veterinarian retains clinical ownership and medical decision-making authority. Some states, however, allow direct non-veterinarian ownership. Always check your state's Veterinary Practice Act before structuring a deal.

Solo and small veterinary practices typically sell at 5-8x EBITDA, depending on location, revenue per DVM, and growth trajectory. Multi-location platforms and corporate-grade practices command 12-18x EBITDA from consolidators like Mars Veterinary Health and NVA. This significant arbitrage, buying at single-practice multiples and eventually exiting at platform multiples, is the core value creation thesis for search fund operators pursuing a buy-and-build strategy in veterinary services.

Wellness plans are monthly subscription programs that cover preventive care (exams, vaccinations, dental cleanings, bloodwork). They improve practice economics in three ways: first, they increase client compliance with preventive visits (from roughly 50% to 85%+), boosting revenue per patient. Second, they create predictable monthly recurring revenue that smooths cash flow. Third, they dramatically improve client retention, clients on wellness plans visit 2-3x more often than non-plan clients and are far less likely to switch practices. Practices with well-designed wellness plans typically see 20-30% higher annual client spend compared to non-plan clients.