Private Equity and Veterinary: What It Means for Veterinary Practice Owners

In recent years, private equity (PE) investment has surged across the healthcare landscape—and the veterinary industry is no exception. Veterinary practice consolidation, group affiliations, and multi-location growth strategies have made the industry a prime target for PE-backed firms.

For veterinary practice owners, private equity presents both opportunities and challenges. Understanding what PE involvement means for your practice—and your future—is essential whether you’re preparing to sell, looking to scale, or just trying to stay competitive.

At Oberman Law Firm, we counsel veterinary practice owners on the legal, operational, and financial realities of PE transactions. Here is what every practice owner should know.

Why Is Private Equity Targeting Veterinary Practices?

Private equity firms are drawn to veterinary practices for several reasons:

• Recurring revenue
• Fragmented market with many solo or small-group practices
• Strong cash flow and low default rates
• Scalability through multi-location expansion or roll-ups

Many PE firms aim to buy a platform practice, improve systems and profitability, and then acquire additional practices to build a PE service organization that can eventually be sold at a premium.

What Does a PE Partnership Look Like for a Veterinary Practice Owner?

PE involvement is not a traditional “sale and walk away.” Typically, the structure includes:

• Majority sale of the practice (often 60 of equity)
• The veterinary practice owners retain minority ownership
• A multi-year employment or clinical services agreement
• Incentive-based compensation (e.g., bonus tied to EBITDA)
• Potential for a second payout when the PE firm sells in 3–7 years

For some veterinary practice owners, this is an attractive model: they receive a potentially large upfront payment, offload administrative burdens, and continue practicing veterinary with a financial upside.

Key Legal Considerations Before Entering a PE Deal

Valuation and Deal Structure

PE firms often offer higher valuations than traditional buyers—but not all offers are created equal. Understand:

• How the purchase price is calculated (e.g., EBITDA multiples)
• What portion is paid upfront vs. held back or contingent
• The tax implications of equity vs. cash deals

Your legal and financial advisors should review any Letter of Intent (LOI) before you sign. Even non-binding terms can influence the final agreement.

Employment and Autonomy

Post-sale, most veterinary practice owners continue working under a clinical service agreement.

Key questions include:

• What are your production expectations?
• Will your clinical autonomy be preserved?
• Can you influence hiring, scheduling, and treatment decisions?
• How long is your required commitment?

Some veterinary practice owners find the new environment collaborative and efficient. Others feel they’ve lost control over their clinical decisions. The difference often comes down to contract terms.

Non-Compete and Restrictive Covenants

Most PE transactions include non-compete, non-solicitation, and non-disparagement clauses. These may limit your ability to:

• Open a new practice nearby
• Hire former staff
• Retain your patient base if you leave

Equity Rollovers and Second Bites

Veterinary practice owners are often invited to "roll over" part of their equity into the PE-backed entity. This creates a potential for a “second bite of the apple”—a second payout when the PE firm sells the business. While promising, this structure carries risk:

• You become a minority owner with limited control
• Liquidity may be delayed or unavailable if the PE firm holds the investment longer
• The second payout is not guaranteed

Clear documentation and a full understanding of your rights as an equity holder are essential.

Is Private Equity Right for You?

PE May Be a Good Fit If You:

• Want to monetize your practice but continue working
• Are interested in building wealth through equity participation
• Welcome administrative support (HR, IT, billing, marketing)
• Want to grow a multi-location group with access to capital

PE May Not Be Right If You:

• Value total clinical and business independence
• Prefer to keep your practice in the family
• Are nearing retirement and want a clean exit
• Dislike corporate reporting structures

There’s no one-size-fits-all answer. What matters most is ensuring the deal aligns with your financial goals, career plans, and personal values.

How Oberman Law Firm Can Help

Private equity deals are complex, high-stakes transactions involving:

• Negotiation of purchase and employment agreements
• Review of equity terms and tax consequences
• Analysis of regulatory and compliance risks
• Advocacy to protect your clinical independence and financial interests

At Oberman Law Firm, we represent veterinary practice owners and help level the playing field during negotiations. Our goal is to ensure that if you partner with private equity, you do so on your terms, with your future protected.

Considering a Private Equity Offer? Let’s Talk First.

Before signing a Letter of Intent or discussing terms with a buyer, contact Oberman Law Firm for a confidential consultation. We will help you understand the deal, protect your rights, and make informed decisions for your practice and future.