By Brad MacLiver
Authorship and profile at Google
When a Vermont (VT) pharmacy or drug store is being sold, seldom does the buyer pay “out of pocket” cash for the acquisition. Even when cash is available, pharmacy acquisition strategies usually involve financing the transaction.
Typical acquisitions take 6-9 months to complete, so theVermont
Along with the buyer and seller the acquisition will involve attorneys, accountants, lenders, valuation companies, industry specialists, along with others. No one wants to pursue 6-9 months of work involving a variety of highly paid professionals without having some confidence of theVermont
The process will begin with determining the value of the business. There are many companies that offer valuation services. However, pharmacies inVermont
In order to complete a valuation the selling company needs to provide up-to-date data. Lenders will not accept old data, or a sellers “gut feeling.” Lenders need to make a decision to finance based on sound and verifiable information.
Structuring the transaction is extremely important. The seller of course wants as much money as possible and wants cash. The buyer needs to spread out the debt service and wants to have as little cash as possible invested in the acquisition.
Pharmacies and drug stores are in an industry where it is more difficult to obtain business loan due to the majority of the value in a pharmacy inVermont
Pharmacies in VT have typically been known for generating profits and to be stable businesses. However, they are usually in leased locations, and their furniture, fixtures, and computers will only provide $15-20,000 of collateral for a buyer possibly requesting a million dollar loan. A lot of money is tied up in inventory, but the small pills are considered by a lender to easy to move out the door in the event of default. Due to these circumstances many lenders will not loan money to these traditional money making businesses. A successful transaction takes a lender that understands the pharmacy industry.
Tips regarding pharmacy in VT acquisitions and finance:
1. Attorneys and CPAs who have been representing the pharmacy seller for many years may see the transaction as putting themselves in a position of losing a client when the business is sold. Make sure they are not only working diligently on the transaction but not slowing or undermining the process.
2. Since pharmacy acquisitions in Vermont take 6 to 9 months worth of work to finalize, all participating parties need to be aware of time tables. Items of importance will much too often end up sitting on the desk of someone who is outside of the control of the buyer or seller.
3. It is essential that all financial information be current. Over the lengthy process, the data supplied to both the buyer and the lender needs to be updated on a regular basis. Several factors can change drastically during a nine month period and theVermont
For the best chance of success when pursuing “pharmacy acquisition finance,” make sure the valuation company and the lender you are consulting have expertise in that industry. Make sure the company that has the pharmacy experience and expertise, and that they are a direct correspondent with lenders who understand VT pharmacy.
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Authorship and profile at Google
When a Vermont (VT) pharmacy or drug store is being sold, seldom does the buyer pay “out of pocket” cash for the acquisition. Even when cash is available, pharmacy acquisition strategies usually involve financing the transaction.
Typical acquisitions take 6-9 months to complete, so the
Along with the buyer and seller the acquisition will involve attorneys, accountants, lenders, valuation companies, industry specialists, along with others. No one wants to pursue 6-9 months of work involving a variety of highly paid professionals without having some confidence of the
The process will begin with determining the value of the business. There are many companies that offer valuation services. However, pharmacies in
In order to complete a valuation the selling company needs to provide up-to-date data. Lenders will not accept old data, or a sellers “gut feeling.” Lenders need to make a decision to finance based on sound and verifiable information.
Structuring the transaction is extremely important. The seller of course wants as much money as possible and wants cash. The buyer needs to spread out the debt service and wants to have as little cash as possible invested in the acquisition.
Pharmacies and drug stores are in an industry where it is more difficult to obtain business loan due to the majority of the value in a pharmacy in
Pharmacies in VT have typically been known for generating profits and to be stable businesses. However, they are usually in leased locations, and their furniture, fixtures, and computers will only provide $15-20,000 of collateral for a buyer possibly requesting a million dollar loan. A lot of money is tied up in inventory, but the small pills are considered by a lender to easy to move out the door in the event of default. Due to these circumstances many lenders will not loan money to these traditional money making businesses. A successful transaction takes a lender that understands the pharmacy industry.
Tips regarding pharmacy in VT acquisitions and finance:
1. Attorneys and CPAs who have been representing the pharmacy seller for many years may see the transaction as putting themselves in a position of losing a client when the business is sold. Make sure they are not only working diligently on the transaction but not slowing or undermining the process.
2. Since pharmacy acquisitions in Vermont take 6 to 9 months worth of work to finalize, all participating parties need to be aware of time tables. Items of importance will much too often end up sitting on the desk of someone who is outside of the control of the buyer or seller.
3. It is essential that all financial information be current. Over the lengthy process, the data supplied to both the buyer and the lender needs to be updated on a regular basis. Several factors can change drastically during a nine month period and the
For the best chance of success when pursuing “pharmacy acquisition finance,” make sure the valuation company and the lender you are consulting have expertise in that industry. Make sure the company that has the pharmacy experience and expertise, and that they are a direct correspondent with lenders who understand VT pharmacy.
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