Selling to a corporate group vs. a private buyer: what owners should know

If you own a dental, veterinary, optometry or multi-physician practice in Canada, there's a good chance a corporate group has already reached out. Consolidators are active, well-funded and experienced buyers. That can be great news for sellers, as long as you understand how their offers work.

How corporate offers are typically structured

• Priced on a multiple of normalized EBITDA, often higher than private buyers can pay.
• Cash at close is commonly a portion of the total. The remainder may be rollover equity in the parent company, an earn-out tied to future performance, or deferred payments.
• A work-back commitment, often three to five years, during which your compensation and clinical autonomy are set by contract.
• Some models, especially in veterinary, are joint ventures where you keep a 20–40% stake and the group buys the rest.
• Non-compete and non-solicitation covenants. Courts in Canada are more willing to enforce these in the sale of a business than in employment.

How private-buyer offers typically look

• Usually priced closer to a percentage of revenue or a lower earnings multiple.
• Mostly or entirely cash at close, often financed by a Canadian bank's professional lending program.
• Shorter transition periods. Many sellers stay three to twelve months to introduce patients.
• Often a better cultural fit if you care about how the practice runs after you leave.

Comparing offers properly

To compare offers fairly, look at the risk-adjusted present value of what you'll receive, not the headline. Ask: how much cash do I get at closing? What is the equity really worth, and when and how can I sell it? What has to happen for the earn-out to pay? How many years must I work, at what compensation, and what happens if I want to leave early?