The future of vet practice sales

In 2022, the Competition and Markets Authority (CMA) blocked the sales of UK veterinary practices to larger corporates as these businesses would control a significant proportion of the veterinary services in particular geographical area, raising competition concerns. As stated by the CMA, this “would result in too many vets’ practices in the same area being under control of a single company, raising the risk of higher prices or lower quality services”.

In addition to the sales that were specifically blocked by the CMA, there has been a knock on effect on other sales, resulting in aborted sales due to the potential corporate purchaser already having a high market share in a particular area.

What does this mean for future sales?

Whilst sales to specific corporates may not be an option due to their dominance in a particular area, it may still be possible to sell to another corporate that has a lower or no market share.

Whilst sales to corporates can achieve high valuations and proceeds, other routes for exiting or selling your business should also be considered. Practice owners who would like to pass on their business to existing employees may want to consider some form of management buyout (MBO) or sale to an employee ownership trust (EOT). Whilst it may not be possible to obtain as high gross proceeds through these routes, there are other benefits that can be achieved. For example, the potential for future ownership may incentive employees to stay with the business, and disposals to EOTs have beneficial tax treatment that would reduce the tax costs of a transaction.

If you would like to find out more about preparing your veterinary practice for sales, potential sales routes and the tax implications, please contact our EQ Healthcare specialists on healthcare@eqaccountants.co.uk or by calling one of our offices.