Interest rates remain elevated, with the Fed’s benchmark rate at 4.25% -4.5%. Veterinary loan rates (SBA and conventional) are currently between 4.5% and 7.5%, making financing more expensive. However, inflation has cooled at 2.4% as of May, and modest rate cuts may be on the horizon, offering some relief for buyers and sellers alike.
The second quarter brought stock market volatility, especially in April after the unexpected tariff announcements. While the market has largely rebounded, ongoing trade uncertainty continues to impact the cost of veterinary supplies and consumer sentiment-both of which influence clinic performance.
Valuation multiples remain strong. Corporate buyers are offering 8x-14x normalized EBITA, depending on size and specialty. While this is below the 2021 highs, the market is still favorable for sellers. Individual buyers are actively reentering the market, typically offering 4x-6x normalized EBITA-especially for well-operated, strategically located practices.
Cash-only deals are becoming less common. Private equity-backed buyers are frequently using creative deal terms to close transactions. This includes:
These structures can offer long-term value but require careful negotiation and a solid understanding of the risks and benefits.
While pet visits have softened slightly and consumers remain cautious, veterinary care remains essential for most families. Buyer interest is still strong-but also more selective. If you’re considering a sale, partnership or transition, now is a smart time to start preparing. Changing interest rates and shifting buyer strategies could influence future opportunities.
Whether you are planning to grow or transition your practice it is imperative to stay informed of the ever-changing veterinary market.
This is a paid sponsored content article from VP Veterinary Advisors.
