This Calder Capital case study outlines how Calder helped the owners of an animal hospital achieve an exceptional sale outcome.
Valuation Summary
Adjusted EBITDA of the Animal Hospital at the time of sale: $1,029,987.
Prior to engaging with the client, Calder conducted a thorough valuation analysis that included identifying 5 similarly-sized sold comparables in the veterinary practice and animal healthcare industry. The average EBITDA multiple across those comparables was 4.65x, and the median multiple was 4.54x. In fact, no comparable transaction exceeded 5.63x. Calder’s valuation analysis estimated total gross proceeds of the business and real estate in this transaction as $7.33M (4.5x), conservatively to $7.89M, as a market-high sale (4.98x).
Background & Deal Summary
The Calder Capital Sell-Side team orchestrated a robust and efficient process, launching this Business to the market in late August. 3.5 months later, in mid-December, the seller accepted a Letter of Intent (LOI).
Results after 3.5 months of confidentially, yet aggressively marketing the business:
- 72 buyers expressed interest in reviewing the business.
- 60 buyers returned confidentiality agreements and were approved to receive the CIM.
- 12 buyers submitted offers.
Top three offers received:
- $11,000,000 offer: $5.5 cash at closing, $4.25 sellers note, and $1.25M in equity.
- $11,425,000 offer: $5,855,000 cash at close, a 4-year 9% interest-bearing $1,000,000 promissory note, and $4,570,000 towards 40% equity ownership.
- $13,100,000 offer: $11.1M cash at close with a $2M in sellers note.
Our client accepted the $13,100,000 offer. The earnings multiple for this sale was 8.73x EBITDA, 3x+ higher than the highest valuation comparable. This is the power of a well-executed sell-side process.
Why Work With Calder’s Sell-Side Team?
The marketing process included strategic and financial buyer research, confidentially marketing the business across 12 M&A listing sites and Calder’s website (which receives 20,000+ visitors per month), a broad database blast to 350,000+ buyers, professional advisors, and business owners, and targeted emails, texts, and phone calls to buyers with specific matching criteria.
The purpose of this case study is to demonstrate that a robust limited auction-style sale process will generally yield the best possible result.
Aggressive, coordinated marketing is the only way to ensure the best price, structure, and fit, as evidenced by this case study. When buyers compete, the best proposal rises to the top, and the seller receives the best price and terms. This is the process that Calder Capital follows with every client.
About Calder Capital:
Founded in 2013, Calder Capital is a cross-industry mergers and acquisitions advisory firm with offices across the United States. Calder provides valuation, sell-side, and buy-side services. We are nationally recognized for excellence in advising $1-100M enterprise value transactions in manufacturing, construction, distribution, and business services. Calder serves business owners, entrepreneurs, family offices, financial buyers, and investors. Learn more at www.CalderGR.com.