About Our Clients
We work with the leading specialty-emergency veterinary practices in North America. These businesses generate the profitability required to fund the highest quality of veterinary care and enjoy the business growth that results from offering such care. Their owners seize opportunities as the market presents them.
Typically, our clients are mature, multi-location practices with:
- 15-150 doctors,
- total annual revenue ranging between $15 and $100 million,
- strong profitability,
- robust growth rates,
- serving a large, desirable market.
These practices are typically under common ownership control, where the ownership is committed to a common set of objectives. However, Cavanaugh Partners has also successfully represented a consortium of practices, not under common control, working together as a group that collectively possessed all the characteristics noted above.
Our Clients’ Perspective
Practice owners come to Cavanaugh Partners when they want to achieve the "optimal future," for themselves and for their practice.
They recognize that as the industry changes, they must proactively respond in order to succeed. Specifically, they recognize that:
- The industry consolidation currently underway is driven by fairly recent, yet fundamental, industry trends -- increased capital investment requirements, evolving work-life balance priorities among newly minted veterinarians, private equity investment in the industry - that will not soon change;
- It is important to differentiate amongst consolidators with differing management and business philosophies, levels of industry expertise and commitments to medical excellence;
- This consolidation has driven business valuations for premier specialty-emergency practices to the highest levels in history and to levels that few industries, if any, manage to sustain over time;
- As this industry consolidation phase matures, practices that choose to remain independent may find dwindling strategic opportunities and face new competitive threats.
In short, our clients recognize the need to timely participate in this industry consolidation in order to maximize the value of their business and best position their practice for the future. Even if they are not yet ready to participate, they recognize that they gain nothing by waiting to plan and prepare to participate. They realize that “going it alone” is not likely the prudent way to engage with these new, financially sophisticated industry participants, so they want the best representation available in their industry. Ultimately, they want to realize the highest net value for themselves and the optimal future for the practices they have built.
Of course, different owners have different reasons for seeking a strategic transition. Those include, but are not limited to:
- Attracting equity partners and capital investment into the practice,
- Seeking for their practice the economies of scale and professional/medical synergies a larger organization can offer,
- Planning for a personal/professional transition for themselves,
- Locking in the historically highest value available for their business, while generating personal liquidity and reducing personal risk
- Securing a financial interest in a larger, rapidly growing, profitable industry consolidator.
These case studies demonstrate typical transaction process steps and timelines, along with the possible transaction process pitfalls and complex ownership challenges that Cavanaugh Partners can help you successfully address. They also provide our clients perspective on the magnitude of additional value that Cavanaugh Partners delivers.
Established emergency / multi-specialty practice (2 legal entities) in business over 30 years sought to explore strategic alternatives. The sole legal owner was the decision maker, but the buy-in of a half dozen “owners in practice” was critical.
Following engagement, Cavanaugh Partners performed 4 months of financial analysis, market analysis and presentation preparation before soliciting interest, then it performed another 6 months of structuring, negotiation (including internal negotiations) and due diligence before closing with the selected consolidator.
Post-merger management at the practice remained unchanged, meaningful liquidity was provided to both the legal owner and the “owners in practice," as well as other key doctors, and the legal owner and the "owners in practice" received a continued financial interest in the consolidator. The legal owner joined the board of the consolidator.
The owner concluded that Cavanaugh Partners had likely generated additional value equal to 3-4x the total fees paid to Cavanaugh Partners.
A group (7 legal entities, 9 hospitals and 5 decision-making owners representing numerous owners) of established emergency / multi-specialty practices that had already collaborated in a practice management group for more than 5 years sought to consider strategic transactions as a single group. The group members retained Cavanaugh Partners individually, but with the condition that these clients would behave as a group.
Early on in the process, Cavanaugh Partners helped the group develop and agree to a dynamic valuation methodology for allocating to the individual legal entities the ultimate “group value” achieved. Cavanaugh Partners performed 5 months of financial analysis, market analysis and presentation preparation, then helped the group select a consolidator with which to negotiate and close a transaction. When, 3 months later, that consolidator failed to close the transaction on the agreed terms and timeline, Cavanaugh Partners reinitiated the solicitation process and helped the group select, over the next month, a new consolidator with which to negotiate and close a transaction. It then helped the group negotiate and close that transaction 4 months later.
Post-merger management at the practices remained unchanged, meaningful liquidity was provided to the owners and select "owners in practice" and the owners received a continued financial interest in the consolidator. The owners' appointed designee joined the board of the consolidator.
The owners, as a group, concluded that Cavanaugh Partners had likely generated additional value equal to 4-5x the total fees paid to Cavanaugh Partners.