Seller guide
Private Equity and Optometry: Should You Sell to a Platform?
Most optometry practices still sell to another optometrist. Here is when a private equity platform is the better buyer, and when it is not.
Short answer
Private equity eye care platforms buy optometry practices to build regional networks, usually paying part of the price in cash and part in equity and asking the owner to stay on. They pay most for multi-doctor practices with strong optical and medical eye care. Many single-doctor practices still get their best result selling to an associate or another optometrist.
Two very different kinds of buyers
An optometrist buying your practice is usually buying a job and a business at once, with a practice loan. The price has to work with what the practice's cash flow can repay after the buyer pays themselves. A platform is buying a location for a network and values the practice on adjusted EBITDA, with its own cost savings in mind.
Neither is better in general. They fit different practices and different owners.
What platforms look for
- More than one doctor, so the practice does not depend on you.
- Strong optical capture and margin. Caro & Associates recommends reporting clinic and optical margins separately, which is also how buyers look at them.
- Medical eye care such as dry eye and glaucoma management billed to medical insurance.
- Limited dependence on any single vision plan.
- A location that fits the platform's map.
How a platform offer is usually structured
Like other physician-practice deals, platform offers typically combine cash at closing, rollover equity in the platform (advisory firms report roughly 20% to 40% in physician-practice deals) and sometimes an earnout tied to future results, plus an employment agreement with a non-compete. Read our explainer on rollover equity and earnouts.
When selling to another OD is the better choice
- You are the only doctor and want a shorter transition.
- You want all or most of the price in cash, with no equity risk.
- You care about the practice staying independent for your patients and staff.
- An associate already knows your patients and wants to own the practice.
Whichever buyer you choose, the starting point is the same: what the practice earns after a market OD salary. Our optometry practice valuation guide walks through a worked example.
Questions to ask a platform
- How much is cash at closing versus equity and earnout?
- What will I earn after the sale, and for how long?
- Who sets optical pricing, vendors and staffing after closing?
- How is my equity valued, and when can I sell it?
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Get a Free Practice ValuationCommon questions
Do private equity firms buy single-doctor optometry practices?
Some do as add-ons near practices they already own, but platforms generally pay the most for multi-doctor practices with strong optical and medical eye care.
Is it better to sell my optometry practice to an associate?
Often, if you want a simpler deal with mostly cash and an independent future for the practice. A platform may pay more for a larger practice but asks for a longer commitment.
Related reading
Sources
Figures are attributed to their source and date. Ranges are published estimates, not a valuation of any practice.