Selling Your Pharmacy

Every pharmacy sale’s different, but knowing what to expect can make the process considerably easier. Our specialist pharmacy sales consultants guide you throughout the transaction, from your initial valuation to completion.

There’s no standard price or single formula that determines how much a pharmacy will sell for.

The value of a pharmacy business can be influenced by its underlying profitability, prescription and other income, location, staffing costs, premises and lease terms, local competition, opportunities for growth and, importantly, the level of demand from buyers at the time it is marketed.

Two pharmacies with similar turnovers or dispensing volumes can therefore achieve very different values.

Historic measures such as a simple pence-in-the-pound calculation can provide an indication of market sentiment, but they should not be relied upon in isolation. Buyers and their lenders will look closely at the sustainable profitability of the business together with the risks and opportunities associated with it.

Ultimately, the market value of a pharmacy is tested by what credible purchasers are prepared to pay. This makes both an informed valuation and the way the pharmacy is presented and marketed particularly important.

If you would like to understand what your pharmacy could be worth in the current market, Hutchings provides free confidential verbal valuations to pharmacy owners considering a sale.

The best time to start thinking about selling your pharmacy is often well before you actually intend to sell it.

Early planning gives you the opportunity to understand what the business is currently worth, identify factors that could be reducing its value and consider improvements while there’s still time for those changes to have an effect.

The right time to actually put a pharmacy on the market will depend on a combination of your own circumstances, the financial performance of the business and wider pharmacy market conditions. Buyer demand, funding conditions and the particular characteristics of your pharmacy can all influence the outcome.

For some owners, retirement or another personal objective will determine the timing. Others may have greater flexibility and benefit from preparing the business over a period of one, two or even several years before bringing it to market.

A confidential conversation and up-to-date valuation can help you decide whether to sell now, prepare for a future sale or simply keep your options under review.

Good preparation can protect value, improve buyer confidence and reduce problems later in the transaction.

Even if you are not planning to sell immediately, it’s worth considering the issues a buyer and their advisers are likely to examine.

Keep your financial information up to date

Buyers need reliable information on which to base an offer. Up-to-date annual accounts together with current trading or management figures can help demonstrate the underlying performance of the pharmacy.

Review profitability and overheads

The sustainable profitability of the business is a major consideration in pharmacy valuation. Staffing costs and other significant overheads should therefore be reviewed carefully in the period leading up to a sale.

Personal, exceptional or non-recurring expenditure should also be clearly identifiable so that buyers can properly understand the underlying financial performance of the business.

Review your premises and important agreements

Lease terms, equipment agreements and other contractual arrangements can affect both value and the progress of a sale. Identifying potential issues early can give you more opportunity to resolve them before they become part of a buyer’s due diligence.

Maintain the performance of the pharmacy

The sale process can be distracting, but buyers will continue to monitor the performance of the business right through to completion. A decline in turnover or profitability can create uncertainty and potentially give a buyer grounds to try to renegotiate.

Start earlier than you think

Some improvements can be made quickly; others need time before their benefit is reflected in the accounts. If you think you may sell your pharmacy in the next few years, starting the preparation process now can put you in a stronger position when the time comes.

Selling your pharmacy may be one of the largest financial transactions you ever undertake. It is therefore important to know not only that your adviser has the right experience and market reach, but that they are working solely in your interests and that you know exactly what their service will cost.

Your Interests Come First – No Conflict of Interest

The seller is our client and we act solely in the seller’s interests.

We don’t charge buyers a fee for purchasing a pharmacy through us, so our advice and negotiations are focused on achieving the best possible outcome for you.

Our No Conflict Guarantee is designed to give sellers confidence that commercial relationships with buyers will not influence the advice they receive or the way offers are assessed.

Where a qualifying finance introduction generates income for Hutchings, that income is credited against the seller’s sale invoice rather than retained by us as additional income.

No Sale, No Fee

Our pharmacy selling service operates on a No Sale No Fee basis.

There’s no agency fee to pay upfront and our sale fee only becomes payable when your pharmacy sale successfully completes. If the sale doesn’t complete, our sale fee is not payable.

This means our interests are closely aligned with yours: we only get paid when you achieve a successful sale.

Clear Fees with No Hidden Charges

You will know our sale fee before you instruct us.

We won’t add unexpected marketing, administration or other hidden agency charges during the transaction. You’ll know from the outset what you will pay when your sale completes successfully.

No VAT on Qualifying Company Share Sales

If your pharmacy’s sold through a qualifying company share sale, our agency service in arranging the sale of the shares is VAT exempt, meaning VAT isn’t added to our applicable sale fee.

For a seller, this can represent a significant saving compared with paying an agency fee plus VAT.

Specialists Exclusively in Pharmacy Sales and Valuations

Pharmacy isn’t one of a number of business sectors we cover – it is our specialist market.

Our experience of valuing, marketing and selling pharmacies gives us an in-depth understanding of the factors that influence pharmacy values, buyer appetite and the practical issues that can arise throughout a transaction.

Recommended by the NPA Since 2005

Hutchings has been recommended by the National Pharmacy Association since 2005, following its vetting process.

For pharmacy owners, this provides an important independent indication of our experience, professionalism and long-standing position within the pharmacy sector.

Extensive Buyer Reach

We maintain an extensive network of pharmacy purchasers, from first-time buyers and independent operators through to established regional and national pharmacy groups.

Our aim isn’t simply to find a buyer, but to identify credible purchasers who are likely to recognise the value of your particular pharmacy and have the ability to complete the transaction.

Competition Designed to Maximise Price and Terms

Where there’s sufficient buyer interest, we seek to create competition between purchasers rather than negotiating with one party in isolation.

Through competitive bidding and, where appropriate, a structured Best & Final offer process, we aim to establish the strongest price and terms the market is prepared to offer.

Importantly, the highest headline price is not always the best offer. We also consider factors such as funding, conditions, transaction structure and the buyer’s ability to complete before advising you on your options.

Confidentiality Throughout the Sale

We understand that confidentiality is one of the greatest concerns for many pharmacy owners.

Prospective buyers are subject to confidentiality requirements and we carefully manage communications, meetings and the release of sensitive information to minimise the risk of staff, customers or competitors becoming aware of your plans prematurely.

Support From Valuation to Completion

Agreeing a strong offer is only part of a successful pharmacy sale.

We remain actively involved after a sale’greed, working alongside you, your solicitor, accountant, the buyer and their advisers to maintain momentum, identify problems and help keep the transaction moving towards completion.