Many veterinarians dreaming of selling their practice focus on whether they should court private buyers, corporations or both. They wonder what their spouse or children will think if they decide to sell out and retire. Sometimes they fear they may end up being bored. And, naturally, they wonder how much their business would bring in the current torrid veterinary hospital market.

Then, once concrete steps are taken toward a sale and the ultimate disposition of the clinic becomes clear, many practice owners who have engaged in mental gymnastics about prospective buyers suddenly realize that they never seriously considered their reasons for selling in the first place. And they often haven’t thought about the objectives of the buyer who will own the business into which they have poured their heart and soul for many years.

Once the realization hits that signing a contract for sale means imminent sayonara to the clinic, many sellers experience a sort of “pre-sale remorse,” second-guessing themselves and wondering if they will end up questioning the wisdom of the sale—perhaps indefinitely.

To avoid doubt about an imagined or pending practice sale, we recommend that our clients engage in some meaningful self-evaluation. Often private veterinary practitioners are so fully engaged in day-to-day clinical and management duties that they deny themselves a genuine opportunity to ponder how they would like to live five, 10 or 20 years hence.

After giving the future good and realistic consideration, it is time for the selling veterinarian to begin evaluating all the options and routes to that future life. But this is precisely the opposite of what is so commonly done.

Of course, your future self and future life can’t be imagined fully without considering those around you. Does your spouse want to stay near family in the East while you want to move to the Rockies? Has your nephew decided for certain that he doesn’t want to become a veterinarian and take over your clinic? Is that daughter of yours who’s in her third year of vet school sure that she wants to take over your hospital, or does she have indominable wanderlust?

Then there’s the money. Once your post-ownership plans are in focus, have you done enough research regarding your finances and the anticipated payout on your clinic sale that you 

Remember that the veterinary clinic market of the new millennium is far different than in the past. Prices are higher. Ownership options are wider. The availability of private buyers is more uncertain than it was back when the cost of veterinary school was rational.

But once you have thoroughly—and I do mean thoroughly—considered your objectives for selling (and yes, simply being 

 is a rational and fair reason to want out), then it’s time to look into the ways those goals might be met. Trust me: This order of operations beats leaving the closing table with a seven-figure check and then wondering “what now?”

Let’s have a look at the numerous new options, other than the obvious immediate and total cash sale of their hospital, that are available to meet practice owners’ well-considered goals.

Locate/cultivate an ambitious, hungry associate

For some long-time practice owners, it is very difficult to imagine suddenly losing control over the business that has taken them years to establish and nurture. It’s really tough. But also tough is graduating from veterinary school and wanting to be a practice owner but having such an overwhelming debt burden that no traditional lender will consider loaning the full price of a solid practice.

For practice sellers who are willing to accept some degree of risk in exchange for realizing their dream of keeping their “baby” in private hands, one answer may be aggressive associate recruitment. Corporate hospital chains, of course, have entire departments dedicated to locating associates for their clinics. But what their headhunters cannot offer is something that might be just the ticket for some practice sellers: a practice buyout over time, with a “sweat equity” investment by the ownership-hungry associate that plays out over several years.

If the right associate is recruited—and savvy recruitment is key—the seller can eventually walk away with a payout. In this scenario the seller receives a sort of annuity that has a far better return than the historical investment in stocks or bonds. All this occurs while not losing immediate control and having a chance to mold the new “eventual owner” into the kind of boss to which a dedicated, hard-working staff can be devoted.

As more and more practices are sold to consolidators, the number of quality practices available for acquisition continues to diminish. As a result, corporate buyers are becoming more flexible with their buyout options, offering a number of heretofore unavailable choices for sellers who want to retain some degree of input into the clinic culture. Owners who participate in one of these creative sale arrangements can often “ease out” of the ownership role instead of bailing out immediately.

Limited time majority/minority ownership split.

 Under this arrangement, the purchasing corporation may buy a controlling interest in the hospital while leaving the seller still substantially invested, say, by retaining 40% to 45% ownership. Simultaneously there is a contractual obligation for the seller to part with their remaining interest three to seven years down the road.

 Some corporate chains are allowing well-qualified associates to purchase from the seller a minority stake in the clinic to be sold. Depending on the management skill of the corporation, this can allow the associate to influence clinic culture during years of transition and also to be financially incentivized to help keep the clinic “the kind of place it’s always been.” For many sellers, this continuity is emotionally important.

 In some instances, if a seller is convinced that the practice will thrive under corporate ownership, the buyer/consolidator will be willing to pay the seller partially in pre-IPO (initial public offering) or “pre-sale to a bigger consolidator” stock in the acquiring entity. This can permit the seller to feel as if they still are experiencing upside profit potential in the acquired shares and in some way remain somewhat ‘involved’ in the former practice’s health and wellbeing.

Christopher J. Allen, DVM, JD is president of the Associates in Veterinary Law P.C., which provides legal and consulting services exclusively to veterinarians. He can be reached via e-mail at info@veterinarylaw.com. Dr. Allen serves on 

Articles

It’s wisely been said that one cannot chart a route until their destination is known. For many long-time veterinary practice owners who are considering a sale, there is a good deal of obsessing over the route and precious little hard thought about the destination. 

How to avoid pre-sale remorse when selling your practice

, a diagnostic tool that allows for early prediction of chronic kidney disease (CKD) in cats—up to two years before a clinical diagnosis becomes possible—has been voted Best New Companion Animal Product for 2019 by the animal health news outlet Animal Pharm.

The predictive tool, created by Antech Diagnostics along with other companies in the Mars Petcare family, only 

became available to veterinarians in October

"In just four months since its introduction, RenalTech statuses have been issued for more than 100,000 cats,” said Jennifer Ogeer, BSc, DVM, MSc, MBA, MA, vice president of medical affairs and commercial marketing at Antech Diagnostics in a 

. “We believe this opportunity to act proactively instead of reactively … could fundamentally change how we, as veterinarians, treat CKD. Now that we have an opportunity to take advantage of all the benefits early care allows, we can endeavor to change the outlook for this highly prevalent disease."

The Animal Pharm award recognized RenalTech for “tapping the next-generation trend of combining artificial intelligence with veterinary diagnostics,” allowing practitioners and pet owners to create individualized health plans that may delay CKD onset and progression.

According to the release, RenalTech is the “first in a series of predictive diagnostic tools that combines the expertise of Mars Petcare, the WALTHAM Petcare Science Institute and Antech.” RenalTech is free of charge for Antech customers.

A predictive tool that enables early diagnosis of kidney disease in cats received high honors within the most popular category of annual awards from Animal Pharm. 

RenalTech named ‘best new product’ of 2019 

Indiana-based Elanco Animal Health, Purdue University and the Purdue Research Foundation have announced a four-year collaborative agreement whose overarching goal is to find solutions to challenges in animal health.

Through the alliance, Elanco and Purdue researchers will work together closely in a number of areas, including protein engineering and microbiome discovery. For Elanco, the partnership promises to decrease dramatically the time it takes for projects to go from the technical need stage into active work.

The agreement includes the potential for many types of research collaborations as well as intellectual property scenarios, especially in areas of expertise in which Purdue excels but Elanco has not yet invested, such as structural biology.

“This alliance … adds momentum toward Elanco’s promise to rigorously innovate for the benefit of our customers and improve the health of animals,” said Aaron Schacht, executive vice president of innovation, regulatory and business development at Elanco, in a 

 announcing the agreement. “Purdue’s dedication to delivering solutions has propelled the institution into amassing strengths in a wide array of disciplines and is a natural partner of choice.”

For its part, Purdue views the partnership as a two-way street—and key to its mission of developing tomorrow’s workforce. “An alliance of this scope educates students on real industry challenges, creating students [who] graduate prepared to solve many of the industry’s greatest issues,” Purdue Research Foundation President Brian Edelman said in the release. “This partnership is designed to educate students on real industry problems, advance research endeavors, provide collaboration opportunities with skilled research scientists and laboratories, and train the next generation of our workforce.”

Purdue Biological Sciences Professor Richard Kuhn, PhD, agrees that the partnership benefits both parties. “It's clear that we have expertise that we can share,” Dr. Kuhn said. “[The alliance will] develop partnerships in terms of training some [Elanco] employees in some of the latest techniques and also developing a pipeline for new employees in which they get to interview and talk to and maybe provide internships for our students."

The partnership will also allow Purdue research faculty to expand their research into new areas in which their “discoveries could be translated and be impactful to animals,” Dr. Kuhn told 

One of the main goals of the partnership between these neighboring organizations is to train future animal research professionals to meet the needs of today’s workforce.

 Elanco, Purdue announce strategic alliance to advance animal health

The North American Veterinary Community (NAVC) has announced 

, as the new president of its board of directors. Allen assumed the position at NAVC’s annual business meeting in January, replacing Cheryl Good, DVM, owner of Dearborn Family Pet Care in Dearborn, Michigan.

Allen has been an NAVC board member for the past five years and is the second veterinary technician to be named board president.

“Following in the footsteps of Lynne Johnson-Harris [RVT] is a great honor.… I feel a great responsibility to my peers to continue the growth and trajectory that is important to our profession and the clients and patients we serve on a daily basis,” Allen said in an organizational 

Allen, a registered veterinary technician, is assistant director of academic advising and recruitment for the veterinary nursing program at Purdue University College of Veterinary Medicine. She also works in the university’s veterinary nursing teaching laboratories, primarily in the areas of anesthesia and large animals.

Allen is also an active member of the National Association of Veterinary Technicians in America (NAVTA), where she has served as a chairperson for several committees and, in 1994, as NAVTA’s Indiana State Representative. She is currently the advisor to the Purdue NAVTA Student Chapter. Allen has served as president of the Indiana Veterinary Technician Association and is an active member of the Association of Veterinary Technician Educators.

Allen and her husband reside in Otterbein, Indiana. They have three children and two grandchildren, and two cats.

Paige Allen, MS, RVT, becomes only the second veterinary technician to serve in this role for the North American Veterinary Community.

NAVC welcomes new president

Hey, veterinary professionals. We know you’re busy. That’s why we’ve made it even easier for you to get the latest veterinary news. 

Click the video below to view the top 3 stories of the week in 60 seconds:

A California breeder has been arrested for allegedly performing C-sections on bulldogs 

Pennsylvania businessman Jonathan Nyce is facing federal criminal charges following a multi-year scheme to 

In our inaugural episode of "The Dilemma Live," Dr. Rosenberg asks practice manager Bash Halow how he would address a team member who wore 

Videos

Want to be in the know? Check out the veterinary news highlights from this week.

News in a minute: animal cruelty, fraud and "The Dilemma Live"

In Arkansas, large animal veterinarians are in high demand but short supply, and some companion animal owners must travel long distances to find a veterinarian. With no veterinary school in the state, interested students must apply to out-of-state programs, but that could soon change, according to an Arkansas State University 

 last Friday, Chancellor Kelly Damphousse, PhD, announced an agreement to collaborate with Adtalem Global Education (ATGE), the parent company of AVMA-accredited Ross University School of Veterinary Medicine, to explore the feasibility of creating the first college of veterinary medicine in the state.

The agreement involves a 180-day exploration period that will include a series of discussions about how to bring this vision to life. “We plan to work closely with veterinarians throughout Arkansas as we move forward in the development of this new college,” Dr. Damphousse said.

Donald Kennedy, PhD, MEd, BS, interim dean and professor of animal science at A-State who will be chairing a task force to evaluate this endeavor, called the potential veterinary school a “dream come true” for many pre-vet students. “I’ve seen a lot of great A-State students who had a dream of being a vet unable to get a slot in a vet college,” he said. “Now we have the chance to open up more slots.”

Senior A-State student Dillon Lechak is one of those students, and he is thrilled about this exciting opportunity. “As a person who has been denied by a veterinary school for the first time, I really think this can open up many doors for current and future students,” he said at the press conference.

According to the release, “the proposed veterinary medicine program would enroll classes of approximately 120 students each year.” Accreditation for the program would be sought by A-State, and graduates would have A-State academic credentials. Additionally, Adtalem would provide “expertise related to veterinary program management and accreditation, as well as capital and operating expense funding."

“With the current resources that Arkansas State can bring to this process, we believe we can have a tremendous positive impact on the veterinarian profession and our agricultural industry,” Dr. Kennedy said.

While news of the potential veterinary school has been well received, Dr. Damphouse wants to emphasize that A-State is only in the “beginning stages” of this process. “This is a 6-month window to explore the opportunity. We are not committing to starting a vet school yet,” he said.

The memorandum of agreement currently awaits approval by the Arkansas State University System Board of Trustees and the ATGE board.

The university is convening a task force that will spend the next six months exploring the possibility of adding a veterinary medical college to its Jonesboro campus.

