Hi Malcolm, could you tell us a little bit about your background?
I’ll try to keep it short so nobody gets bored. After qualifying, I got a few years of practice experience before setting up my first venture – Westway Veterinary Group – in Newcastle in the mid-1970s. I built that up over 15 years to a seven-site group.
I then took a step back from Westway to focus on a wholesale firm I had set up, called Vet Direct. I then came out of Westway, as per the partnership agreement I had set up earlier. By then the ownership laws had changed and the corporates had started to appear on the scene.
I like to keep busy, so I then decided to set up a practice group called Firstvets, which I developed into a national group covering the midlands, the east coast, Scotland and the north-east. That grew rapidly over the next six years – and when the opportunity came to sell, it gave me the time to concentrate on, and expand, the Veterinary Business Agency (VBA).
Could you tell us a little bit about the VBA – what it does, who it helps and how it works?
The VBA had been operating before the advent of the corporates, but developed more rapidly once they became embedded in the sector.
Owners were being offered £900,000 when they had expected to get, say, £300,000 – and obviously they jumped at the chance, many owners having no idea of the true worth of their practice. So, we developed a style of helping people sell their businesses and maximising what they could get for that business.
We have never – and will never – actually put a price on a practice to a potential buyer, but let them make an offer with the maximum available information on the practice concerned. Financially, we will look to how we can maximise the maintainable profit in that practice and, therefore, increase what the buyer would pay.
We ensure total transparency of the practice financial details to potential buyers combined with, for example, extensive practice background information, competition and demographics. Throughout the process of due diligence, we will assist the seller, working with their accountants and lawyers through to completion of the sale.
The corporates have a team of experienced financial personnel and deal with two or three practice purchases per week – our aim is to level the playing field for the sellers.
It seems the corporate buying bubble may have finally burst, but can practices still be sold for a good price?
The market has slowed dramatically throughout 2019 and you just have to look at the accounts of all the corporates to see why this has happened. Although the market has reduced, good prices can still be obtained for well-presented practices.
There is always going to be a market for a profitable business – and that is where we can help.
So, if I was the owner of a five to six-vet practice, how would working with the VBA help me get the best deal?
We go through the accounts in forensic detail before giving a realistic valuation – that initial valuation will always be a little conservative in that initial estimate – before undertaking a more comprehensive valuation of the practice.
We tend to work on these elements off-site or at a time staff are not present, so we don’t make the process difficult for the owners. We would then approach the corporate practice to gauge interest before sending over a basic flyer that protects the identity of the seller during the initial phase.
We would get potential buyers to sign disclaimers for confidentiality, then send them the sales memorandum and wait for them to extend offers. From those offers, we would talk to the owner and select a preferred bidder.
Once an offer has been accepted, we would then assist with everything – working with the lawyers and letting the accountants produce the information that was necessary for the due diligence responses. We would assist through to the final completion of the sale.
With such a busy working life, do you ever have any time for anything else?
As I said, I do like to keep busy, but I do make time for other interests. I play tennis – usually a couple of times a week – and I used to do a lot of boating.
I’ve got three children and six grandchildren now, so I enjoy being with my family; and I like doing a bit of art – I am really into designing copper art.
It’s a busy life, but one I love.
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