By Robert Leark, PharmD, WSPC Board Member
You’re considering buying a pharmacy. Congratulations on this exciting next step! Here are the top five important considerations when navigating the purchase process.
#1 The Confidentiality Agreement
The sale of a business is confidential. As the buyer, you will need to review many financial and prescription records and have confidential discussions with the seller, accountant, attorney, wholesaler, lender, and others. Be sure to have an executed confidentiality agreement that protects both you, the buyer, and the seller.
#2 Due Diligence
Just as you would have an inspection when purchasing a home, be sure to thoroughly review all relevant documents, including the financials, tax returns, prescription records, vendor contracts, and lease agreements, when determining if you want to make an offer and move forward with the acquisition.
#3 The Offer
Making an offer that is fair and equitable to both parties involved is a critical part of the deal. A buyer always wants to buy low, and a seller always wants to sell high. A third-party business evaluation can help bridge the gap when you are negotiating a purchase price.
This is the most integral part of the deal. Be sure to use a lender who is familiar with pharmacy loans. The community pharmacy landscape is constantly evolving, and it is extremely beneficial for a first-time buyer to use an experienced pharmacy lender.
Once you have navigated the intricacies and are ready to close, be sure all your licensing and contracts are in place. Most agencies will acknowledge a power of attorney and allow the buyer to bill under the seller’s provider’s numbers until they receive their own.
The acquisition of a community pharmacy is complex and can be overwhelming for first-time buyers and sellers. Even as an experienced multi-store pharmacy owner, I utilize the tools from AmerisourceBergen’s Pharmacy Ownership Program to help evaluate acquisitions and provide pharmacy valuations for any deal I am interested in pursuing.
WSPC cares deeply about helping its members make sound decisions abought the future of their pharmacies. WSPC offers reputable resources for the buying and selling process. Whether you would like to talk with a WSPC member who has purchased or sold pharmacies, contact a financial institution of specialized business consultants, or reach out to others interested in working with independent pharmacies, WSPC can help.
For more about independent pharmacy buying/selling or succession planning options, WSPC has a group of individuals with experience. If you are interested, please give us a call at 844-977-2498 or send us a message.