Two-Doctor Small Animal Veterinary Practice, Colorado

$1.6M

Revenue

$848K

SDE

1.2x

Multiple

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Full Editorial Writeup

This is a two-doctor small animal veterinary practice in Colorado operating out of a leased facility, with both the physical space and the clinical equipment fully updated within the past year. On $1.63M of gross revenue it throws off $848k of seller's cash flow and $534k of EBITDA, meaning roughly 52% of revenue converts to owner earnings before add-backs. That is an exceptional margin profile for a veterinary practice and signals a mature, well-run book of returning clients rather than a startup still buying its patient base.

Small animal veterinary is one of the most durable service categories in the SMB universe. Pet owners treat their animals like family and continue to pay for wellness visits, vaccinations, dental work, and sick care through downturns, which is why the sector has drawn consolidator and private-equity capital for the past decade. Two doctors and recently modernized equipment give a buyer a real operating platform rather than a single-vet practice tied entirely to the founder.

The headline here is price. At $1.0M asking against $848k of cash flow, this is a 1.18x multiple, which is far below the 3x to 6x range veterinary practices typically command. Combined with seller financing on the table, the structure implies either a fast exit, an undisclosed constraint, or aggressive add-backs in the cash flow figure. That gap is the entire diligence thesis.

Why we like it

Earnings quality is strong on paper: $848k of SDE and $534k of EBITDA on $1.63M revenue is a 33% EBITDA margin, which is at the top end for a small animal practice. The delta between the two figures ($314k) is owner compensation and add-backs, so a buyer who does not draw two doctor salaries can capture real cash.
Veterinary care is genuinely durable and recurring. Clients return for annual wellness, vaccines, dental cleanings, and inevitable sick visits, and a two-doctor practice has a returning patient panel that renews by default rather than being re-won each cycle. This is the kind of boring, sticky cash flow that compounds quietly.
The category has powerful tailwinds. Pet ownership expanded structurally post-2020, spend per pet keeps rising, and veterinary consolidators are actively acquiring practices, giving a buyer both organic growth and a well-defined eventual exit at a higher multiple than the entry price here.
The entry math is the standout. A 1.18x cash flow multiple with seller financing is priced for a distressed or fast exit, not for a healthy vet practice, so if the numbers survive diligence the downside is heavily protected and the re-rating potential to a 3x-plus category comp is enormous.

How to improve it

Verify and then optimize the doctor staffing model in the first 90 days. If the seller is one of the two doctors, model the cost of replacing that clinical labor with an associate vet at market comp, then reprice services to protect the true post-close margin.
Add recurring wellness and dental membership plans. Bundling annual exams, vaccines, and cleanings into a monthly subscription smooths cash flow, raises visit frequency, and increases client lifetime value, which is exactly what consolidator buyers pay premium multiples for.
Build out high-margin ancillary revenue. Push in-house dental, diagnostics, and prescription diet and pharmacy sales, all of which the recently updated equipment already supports, to lift revenue per visit without adding client acquisition cost.
Modernize the front end and online booking. A simple booking portal, automated reminders for vaccines and wellness visits, and reactivation campaigns for lapsed clients typically recover meaningful lost revenue at near-zero incremental cost.
Negotiate or extend the facility lease early. Since the practice operates in a leased space that was just updated, lock in favorable lease terms or an option to renew so the value of the tenant improvements is not exposed to a landlord squeeze at renewal.
Add a third exam room shift or extended hours if capacity allows. Two doctors in a modernized facility may be turning away appointments; measuring booked-vs-available capacity can unlock top-line growth without capex.
Formalize a fear-free and client-retention program. Reducing no-shows and improving the client experience raises rebooking rates, which is the single biggest lever on recurring revenue in a practice like this.

Diligence notes

Interrogate the 1.18x multiple immediately. A veterinary practice this profitable does not sell at 1.18x cash flow without a reason, so confirm whether there is a lease problem, a departing lead doctor, a licensing issue, revenue concentration in one vet, or aggressive add-backs inflating the $848k figure.
Reconcile the $314k gap between SDE and EBITDA. Determine exactly what add-backs bridge the two numbers, how much is owner and family compensation, and what a buyer must actually pay in market-rate doctor salaries to run the practice, because that dictates real go-forward earnings.
Confirm the associate and doctor situation post-close. Find out whether both doctors stay, whether either is the seller, and whether there are signed employment or non-compete agreements, since the entire value of the practice depends on retaining clinical capacity.
Scrutinize the lease terms and the recent facility and equipment upgrades. Verify remaining term, renewal options, rent escalators, and who paid for the buildout, and whether any of the updated equipment is financed or leased with obligations that transfer.
Review the client and revenue base in detail. Pull the active patient count, visit frequency, revenue split between wellness, surgery, diagnostics, and pharmacy, and any concentration among referring sources or a single high-volume doctor.
Validate the seller financing terms and the reason for sale. Understand the note structure, down payment, rate, and personal guarantee, and get a credible explanation for why the owner is exiting at this price, since the discount is the central risk and the central opportunity.

Source

Originally listed on BizBuySell. View original listing →