Conducting Due Diligence in Veterinary Mergers and Acquisitions: What to Assess and How to Mitigate Risks

Mergers and acquisitions in the veterinary world are becoming more common as practices look to grow, expand, or transition ownership. But jumping into a deal without proper due diligence can lead to serious financial and legal risks. Whether you’re buying, selling, or merging a veterinary practice, it’s essential to assess everything from financial health and client base to staff contracts, licensing, and regulatory compliance. Skipping over the fine print can result in unexpected liabilities that impact the long-term success of the transaction.

One of the most critical steps in due diligence is a thorough legal review of contracts, leases, vendor agreements, and employment terms. You’ll want to confirm that there are no hidden obligations, expired licenses, or non-compete clauses that could hinder your future operations. Additionally, assessing the practice’s compliance with state veterinary regulations and controlled substance handling requirements is vital to avoid potential violations. A business attorney experienced in veterinary law can spot red flags and help structure a deal that protects your interests.

Financial records are another key piece of the puzzle. Reviewing tax filings, accounts receivable, and debt obligations provides a clearer picture of the practice’s true value. But financial due diligence is not just about numbers—it’s also about understanding the reputation of the practice, client retention rates, and how existing goodwill translates into ongoing revenue. Working with both a business attorney and a CPA ensures you’re getting the full picture and not missing anything that could impact the deal’s success.

Conducting due diligence is not something you should do alone. These transactions involve layers of legal complexity and risk that require experienced oversight. An attorney can help you negotiate terms, draft purchase agreements, and protect you from future disputes by ensuring all legal aspects are handled correctly. If you’re considering buying or selling a veterinary practice, don’t move forward without expert legal guidance—because protecting your investment starts long before the ink dries on the contract.