In a recent episode of 360 Half Seconds, Matt sits down with host Kia to answer a big question on every owner’s mind: How often does the market change, and what actually drives those changes?
The Short Answer: It’s Complicated
Market fluctuations don’t follow a calendar. There’s no set schedule where things rise or fall on predictable dates. Instead, the market moves in response to a complex mix of internal and external factors—and not always the ones you’d expect.
So What Does Influence the Market?
Contrary to common belief, outside forces like elections or interest rate hikes don’t usually have a direct, predictable impact on veterinary practice values.
Instead, Matt points to these key internal drivers:
1. Recaps & Mergers
One of the most significant influencers? Private equity recaps and mergers among corporate buyers. When buyers recap—meaning they’re either acquired, merge, or raise new capital—it changes how much they can (and are willing to) pay for practices. If they don’t get the return they expected in a recap, they’ll likely adjust their acquisition offers downward.
As Matt explained, “If a buyer is expecting to recap at a 23x multiple but only gets 19x, they can’t keep offering the same high prices for practices.” And when one big buyer adjusts, others often follow.
2. Cost of Capital
Yes, interest rates affect the cost of borrowing—but not all buyers are impacted equally. Many large groups operate with funds raised years ago at lower rates, meaning current interest rate changes may not impact them immediately. Trying to time the market based on rates is, as Matt puts it, “a fool’s errand.”
3. Industry Consolidation
When two corporate buyers merge, that’s one less buyer in the market. While it can mean more power for the merged entity, it also reduces competition for your practice—which can affect offers.
Why This Matters for Practice Owners
If you’re a practice owner trying to decide whether to sell now or wait, don’t get distracted by headlines or national trends. Instead, focus on what’s happening inside the veterinary consolidation space.
Matt summed it up this way: “Industry dynamics—like recap multiples and consolidation—have far more impact on practice sale values than things like interest rates or politics.”
What Should You Do Next?
If you’re even thinking about selling—whether now or down the road—it’s worth having a conversation. Understanding how market forces affect your practice is the first step toward making an informed decision.
No pressure. No strings. Just expert insight to help you explore your options.