How Quigley Eye Specialists Approaches Valuations

The Valuation Process

How Quigley Eye Specialists Approaches Valuations

By Aaron Bradley, Director—Finance & Business Development

The “value” of a practice is more than its financial stability and health. Indeed, many other factors go into determining the structure of the agreement that might be presented to eye care practice owners. Of course, the number is important—but it’s also important to see what joining a private equity organization can bring you in ongoing value.

Are there synergies? Quigley Eye Specialists looks for stable practices where our team can bring synergies and maximize the eye care professionals’ goals. We realize that every administrative task required of owners is time away from patient care. So there are financial benefits to bringing in an infrastructure support to marketing, a call center, billing tasks and more. Having trained experts take on those roles frees eye care professionals to align themselves closer to patient care.

Once practice owners and Quigley Eye representatives have had some initial introductions and see some potential in continuing discussions, the practice owner is asked to share some data—and we’ll sign a nondisclosure agreement to work up a nonbinding offer. This can take a few weeks to a few months, depending on how quickly the owner can provide the information.

The financial valuation takes into consideration many quantitative and qualitative factors and is likely a similar process used by any other potential buyers. We will request two to three years of tax returns and accounting records from QuickBooks or other financial software system the practice uses. We’ll also ask about the size of the space, available lanes and the structure of the lease in place if the real estate is not owned. Other inquiries on equipment leases, outside services, other professional fees, etc., also assist in the valuation process.

When it’s time to present this nonbinding offer, many owners look straight to the bottom line—and that’s not surprising. But there are other ways to look at it—especially for owners who do not yet want to walk away from practice. For example, owners may be offered equity in Quigley Eye, an asset that has shown phenomenal growth over the past few years. They may also see the benefits that come when the practice functions more efficiently and at a higher level of production, which benefits the patient and the provider.

Ultimately, the relationship has to work for everyone involved.