Attorney Patrick Klingborg speaks on Due Diligence in Practice Sales and Purchases

Due Diligence Issues When Buying or Selling
a Veterinary Practice

Many people have heard the term "due diligence" in the context of a business transaction but what, exactly, does it mean? Some treat due diligence like afterthought, but savvy buyers and sellers of veterinary practices leverage the due diligence process to maximize their financial results. In this 90-minute session, our speaker will:

• Demystify the due diligence process.
• For Sellers,explain what buyers want to see during due diligence.

• For Buyers, explain issues with veterinary practices that deserve close inspection.

• For all parties, give tips and tricks to make the due diligence process as smooth and efficient as possible. This makes it easier to close a good deal at the best price ... or to avoid a bad deal altogether!

This session is the second part of a three-part series. In 2021, the first installment of the series described the deal terms that are negotiated in legal documents when buying or selling a veterinary practice. In 2022, the second installment of the series will cover the due diligence process as outlined above. In 2023, the third installment of the series will address the overall road map to buying or selling a veterinary practice.

About the Speaker:

Patrick Klingborg, Attorney, San Diego, CA

Patrick Klingborg, Attorney, San Diego, CA

About the Speaker: Mr. Klingborg is an attorney at the Solomon Ward law firm and he represents owners of veterinary practices when selling their practices. His representation includes helping his clients negotiate the amount of the purchase price, the timing of the payment of the purchase price, the post-closing earnout structure, employment agreements between the selling practice owner and the buyer, real estate leases for the practice location and the allocation of risk for liabilities that may arise after the sale of the practice is complete. Patrick has handled the sale of many types of business, in deals ranging anywhere from a few hundred thousand dollars all the way up to a billion-dollar merger for a publicly traded company.

Patrick is an associate attorney at Solomon Ward and he can be reached at pklingborg@swsslaw.com or 619-238-4882.

Patrick Klingborg on 'Negotiating the Sale of Your Practice: What's on the Table?"

WAIKOLOA VILLAGE, HI – Business attorney Patrick Klingborg presented a lecture titled “Negotiating the Sale of Your Practice: What’s on the Table?” on the Big Island of Hawaii last month. The lecture was offered as the business program supplement to The 36th Muller – Ihrke Veterinary Dermatology Seminar & The 22nd Veterinary M-E-D Seminar.

Klingborg addressed the state of the mergers & acquisitions (“M&A”) market. M&A is a term that broadly refers to the industry of buying and selling businesses. Klingborg described the M&A market – including as it relates specifically to the veterinary services industry – as favorable to those interested in selling a business because there is strong demand from buyers. In particular, buyers are attracted to the reliable year-over-year growth in revenue and/or Earnings Before Interest, Depreciation and Amortization (“EBITDA”) that veterinary practices often enjoy. 

When it comes to the sale of a veterinary practice, Klingborg explained several of the major deal points that sellers can expect to negotiate – and where sellers can push for more favorable terms – including the importance of a good term sheet (also known as a letter of intent), the different options for structuring the transaction, the type of consideration a seller may receive (i.e., cash, stock or a mix of both), the range of payment schedules, the scope of assets and liabilities transferred to the buyer and the employment package for the selling practice owner. 

Potential sellers can seek to maximize their return in several ways. Strategies include strengthening the EBITDA of a practice (such as by updating pricing, increasing marketing, offering new products or services and decreasing expenses), organizing financial statements and contracts in advance so that it is easy for a potential buyer to quickly review them and highlighting any advantages unique to a practice due to its location, market share or client base.

For more information, contact Patrick Klingborg at pklingborg@swsslaw.com or 619-238-4882. 

Patrick A. Klingborg | Attorney

Solomon Ward Seidenwurm & Smith LLP

401 B Street Suite 1200 | San Diego, CA 92101

o 619.231.0303 | d 619.238.4882 | v-card

pklingborg@swsslaw.com | www.swsslaw.com

Please read the legal disclaimer that governs this email and any attachments

Patrick Klingborg is a transactional attorney who has represented owners of medical practices in selling their practices to various large "corporate" buyers. In doing so, he helps his clients negotiate the amount of the purchase price, the timing of the payment of the purchase price, the post-closing earnout structure, employment agreements between the selling practice owner and the new corporate buyer, real estate leases for the practice location and the allocation of risk for liabilities that may arise after the sale of the practice is complete. One of Patrick's strengths is the fact that he has a broad background from which to draw during negotiations. With experience at both a mid-size regional law firm and a large international law firm, he has worked on business sales ranging anywhere from a few hundred thousand dollars all the way up to a billion dollar merger for a publicly traded company.

Patrick is an associate attorney at Solomon Ward and he can be reached at pklingborg@swsslaw.com or 619-238-4882.