Animal Clinic AC002 – North-East Kansas
Located in NE Kansas, this animal clinic excels in the science of Veterinary medicine and was founded in 1984 and incorporated as an S-Corp. Since then the owners and their associates and staff have excelled in compassionate veterinary care in Atchison and the surrounding regions. This is a mixed animal practice that offers the local animal community emergency veterinary services as well as medical, surgical, and dental veterinary care for companion animals, and medical and surgical services for large animals. With an in-house pharmacy and access to specialists, the practice offers a one stop shop for client's animal health and medical care. Due to a period of rapid expansion, the business has grown to be the largest and most dominant competitor in the area providing the broadest offering of services. Specific services include medical, diagnostic and therapeutic treatments such as: anesthesia, surgery, vaccinations, laser therapy, parasite prevention and control, blood transfusions, hospice and euthanasia services, pain management, radiology, as well as pregnancy consultation and delivery services including ultrasound technology. The practice also offers general care services such as boarding, grooming, bathing, dental care, micro-chipping services and wellness exams. The large size of this practice allows it to be much more available and responsive to its more than 11,000 clients, particularly in the case of pet emergencies and home consultation services. The practice maintains a professional website with online appointment scheduling to allow easy access for its customers and also recently updated its digital x-ray software and radiograph machine, fully integrating this with new computer software. The practice has a full in-house pharmacy and two mobile units to reach its rural customers and respond to immediate/emergency client demands. Due to its dedication and commitment to filling all of its clients’ needs they have a great reputation as evidenced by its fantastic customer loyalty (99% repeat business) and the constant referrals that they receive One partner / owner is nearing retirement and is interested in selling their 50% portion of the business within the next few years and will stay on, in some capacity, to mentor a new owner and help transition the business to ensure its continued success. Since opening the business in 1984, the partners have continued to expand by bringing on highly qualified and personable staff; currently employing 11 people including 3 other veterinarians (excluding the retiring owner). The real estate and facilities are owned by the owners via a separate legal entity (LLC) and leased back to the business. This includes an approximate 3,500 square foot veterinary building, and 325 square foot storage warehouse housed on an approximate 0.5 Acre piece of land. Ideally, in time, these assets would transfer with the business through a purchase, lease-to-purchase or lease arrangement. The superbly managed and expansive strategy adopted by the owners over the past 5 years, has allowed the business to operate with very little debt and experience constant growth with over the past five years. Clearly, there is opportunity for continued growth as revenue has grown at a compound annual growth rate (CAGR) of 6.5% over the past 5 years (from 2009 to 2013) culminating in gross revenues reaching ±$1.25 million in 2013. The business has consistently been cash flow positive throughout and is able to generate annual discretionary cash flow earnings to new owners, i.e. adjusted EBITDA, of more than $325K (before any new owners remuneration), sufficient to service any debt financing. The estimated value range of this practice from operations is between $550K and $880K (excluding cash, receivables, inventory, liabilities and facilities). Therefore, a 50% buy-in for a new partner (Dr. Hansen) would be between $275K and $440K.
* Adjusted EBITDA = EBIT plus Depreciation and Adjustments (excluding Owners compensation)