How does pharmacy valuation differ between different types of buyers and what drives value?
The pharmacy valuation process is an extremely valuable asset to the pharmacy owner. Whether you require a simple market analysis or a full appraisal, Pharmacy Consulting Broker Services will guide you in determining your true value before setting a price. Determining your pharmacy value is essential and should be done before talking to or sharing information with any potential Buyer.
Valuation Drivers When Selling a Pharmacy
Valuations can vary quite a bit between a chain versus an independent. You really have to be aware of the value drivers when pricing a pharmacy. Independents are often priced to independent buyers based off a multiple of EBITDA which is “earnings, before interest, taxes, depreciation, and amortization,” versus a chain valuation method of dollars per prescription. You really want to look at all valuation methods and price your store accordingly.
Matching Buyer-Type with Valuation Method
One of the keys in getting the highest price for your pharmacy is matching the buyer-type with whichever buyer brings the highest valuation. They are very different. You can look at a multiple of EBITDA, dollars per prescription, percent of sales; you really want to try to match the buyer-type with the valuation that’s going to bring the highest value. When you look at chains, they value pharmacies very differently than independents. Chains look at dollars per prescription and percent retention. An independent buyer is going to look at net profit and a multiple of that net profit. Ideally you want to match the ideal buyer with the ideal valuation method to net you the highest price.
Pricing Services We Offer
We offer pricing services from an Opinion of Value all the way to a full appraisal. Opinion of Value is more of a market analysis to give you a snapshot of what your pharmacy is worth in today’s market. An appraisal is used more for legal purposes, for estate planning, and tax purposes. Call me today. I’d like to go over all the possible valuation methods that apply to your pharmacy and we can see what nets you the highest value.
