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Q&A: Coronavirus (COVID-19) & Veterinary Practice Transactions

David McCormick, MS, CVA, Simmons & Associates, Boalsburg, Pennsylvania

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Q&A: Coronavirus (COVID-19) & Veterinary Practice Transactions
Published Friday, March 20, 2020, at 3:00 PM EST

Rapidly changing community and economic circumstances may pose particular concern for those in the process of selling or purchasing a veterinary practice. We interviewed David McCormick to get an idea of how the current pandemic situation is impacting practice transactions.*

If I'm in the middle of a purchasing a practice, what impact does the current coronavirus situation have? Should I reconsider?

It depends on the practice and the community; each situation will be different. Overall, I am not seeing delays in transaction closings. In one case,  the lender is expanding a line of credit in case the buyer needs it post-closing. Transactions appear to be moving forward so far.

It is becoming important to maintain open discussion between buyer and seller on status of the situation, practice protocols, and plans moving forward. This is such an unprecedented event, and everyone is trying to adapt as it develops.

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What impact does the current situation have on the process of selling my practice? Could the deal fall through due to economic changes?

New inquiries on practices for sale are still coming in; buyers are still inquiring about available practices. I am optimistic that as associates spend more time at home—catching up on things, getting their own paperwork and life plans back on track—it’s possible we’ll see more inquiries coming in as people revisit their career goals.

I am currently working on bringing several new practices for sale onto the market. If you are planning to sell, I think it is still reasonable to move forward. Much of the timing for the transaction will depend on the impacts at the community level where the practice is located, and the economic impacts to that community.

Could the deal fall through due to economic changes? That’s always a possibility. Being flexible and keeping communication open are the keys. Nothing is cast in stone for the buyer, seller, or the lender. As long as everyone still wants the deal to happen, a path forward can be forged.

Is there anything I can do to help my new startup weather this storm?

This advice applies to all practices, but especially new practices:

  • Enact protocols so you can still receive patients for care while maintaining adequate social distancing and following safety guidelines. 
    • No need to reinvent the wheel on safety guidelines; there are resources from people sharing what they’ve learned already (eg, Coronavirus Curbside Check-in and Triage), but figure out what works for your practice, and get those protocols in place. Once you have a protocol, write it down, and train the team.
  • Offer third-party payment plans, recommend pet insurance, and make it easier for pet owners to face the economic challenges ahead. 
    • Making these options available can help bring new clients to the practice.
  • Leverage technology, including telemedicine. If you aren’t already practicing telemedicine, now is a good time to consider implementing. Again, there are resources available to help you get started (eg, the AVMA Resources on Telehealth and Telemedicine). 
*Drafted from telephone conversation held March 20, 2020.

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