What EBITDA multiple does an optometry practice sell for?

Owners and buyers both ask for the multiple, as if one existed for the whole trade. It does not. A multiple is a shorthand that a valuator reaches after studying a particular practice and comparing it with deals that actually closed. If someone quotes you a figure, ask where it came from, what kind of practice it described, and what earnings it was applied to. Without those answers it tells you very little.

The earnings come first

A multiple is applied to earnings, so the earnings must be sound before the multiple matters. Ask how the seller’s figures were recast: which owner expenses were added back, what the optometrist would be paid as an employee, and whether any one-time items were removed. Ask how the recast earnings were built. Have your accountant read the statements line by line.

What moves the multiple

Exam income and dispensary income behave differently, and a practice leaning on one is not the same as one balanced between them. Dependence on the owner-optometrist matters, because patients may follow the doctor out the door. Look also at the lease, the equipment, the staff and how steady the recall list is. Each of these can push the multiple up or down for a particular practice.

Who the buyer is

A chain or a group buying several practices may weigh a practice differently from a single optometrist buying their first. A group may value the fit with its network, while an individual buyer may care most about what the practice can pay after financing. Ask your adviser how the likely buyer would see it, and avoid assuming that every buyer applies the same lens.

Getting a figure you can rely on

• Ask a valuator to show the comparable deals behind any multiple.
• Ask for the recast earnings and each add-back, in writing.
• Split exam and dispensary earnings before comparing practices.
• Read the optometry due diligence guide before you accept a number.