Practices owned by private equity firms are now part of the optical landscape, just like big-box and online retailers. About 7% of U.S. Optometrists are now backed in some way by private equity, and new acquisitions are so frequently announced in Vision Monday that they’re becoming background noise. Why is this happening? Because health care is the fastest-growing segment of the economy, and PE firms know it. They’ve decided that there’s money to be made in creating a hybrid of private-practice and corporate optometry. And there are a lot of practice owners who are more than willing to sell part or all of their practice to investors. What do they see in it?
For practice owners who are nearing retirement, PE can be like a reverse mortgage – you get cash for your business, but you still get to practice as long as you want. For others, it’s an opportunity to get rid of all the headaches of running a business and focus on optometry. PE groups usually promise that they will preserve the culture of the practice, while installing their own business systems and controlling the optical. The bottom line is that the seller gets to control whatever goes on in the exam lane, and the investors take care of –or control, if you prefer – everything outside of it.
Whether selling to PE investors is right for a practice owner, or not, largely depends on two things: how soon the owner plans to retire, and his or her desire to control the practice. Selling provides the opportunity to reduce stress levels and get back to basics – the doctor controls what goes on in the exam lane, and the investors take care of the rest. But for those who like to control their own destiny, who relish the challenge of making their business run smoothly and profitably, staying independent is the way to go. One thing is certain, though: once you make the deal, there is no going back.