How Optometry Practices Are Valued
Optometry is following the consolidation playbook established by dental and veterinary - PE-backed platforms are acquiring independent OD practices at scale. MyEyeDr (backed by Goldman Sachs, 900+ locations), EyeCare Partners (500+ locations), and Total Vision (now part of FFL Partners) have created a two-tier market where corporate buyers price practices on different methodology than private OD-to-OD transactions.
Private Buyer Valuation (OD to OD)
When one optometrist buys another's practice, the standard framework is a percent-of-revenue (or SDE-based) approach, calibrated nightly against recent disclosed OD-to-OD transactions in our database. Pricing depends heavily on profitability, optical dispensary performance, medical vs. routine vision mix, and patient panel size.
Within the comp set, practices with strong optical dispensary revenue and 30%+ medical eye care (treating glaucoma, macular degeneration, dry eye) sit at the premium end. Practices that are primarily routine eye exams with minimal optical sales sit at the lower end. Run a valuation for your specific placement.
PE/Corporate Buyer Valuation
PE-backed consolidators evaluate optometry practices on EBITDA, with platform and add-on tiers priced differently. The specific tier depends on whether your practice meets platform criteria. PE buyers have specific filters - not every practice qualifies for the premium tier.
PE platforms typically require: minimum $800K+ revenue, strong optical capture rate (65%+), medical eye care capability, modern equipment (OCT, retinal imaging), and willingness to operate under their management model. The selling OD usually stays on as a clinical employee for 3-5 years.
Key Value Drivers
Medical vs. routine vision mix is the primary differentiator. Practices with 30%+ medical eye care revenue (glaucoma management, diabetic eye disease, macular degeneration, dry eye treatment) generate higher reimbursement per visit and are less dependent on vision plan economics. Medical optometry also makes the practice more defensible against online optical competition.
Optical dispensary revenue and capture rate directly impacts profitability. The optical dispensary should generate 45-55% of total practice revenue with 60-65% gross margins. Capture rate - the percentage of exam patients who purchase eyewear at your practice - should be 65%+ for a well-run dispensary. Online optical competition (Warby Parker, Zenni) has pressured capture rates, making this metric increasingly scrutinized.
Patient panel size measures the active patient base. Practices with 5,000+ active patients (seen within 24 months) are significantly more valuable than those with 2,000 patients. A large panel provides predictable exam demand, optical sales potential, and referral volume for medical services.
Technology and equipment signal clinical capability. Practices with OCT (Optical Coherence Tomography), retinal imaging, visual field testing, and corneal topography can diagnose and manage medical conditions that generate higher reimbursement. Equipment over 10 years old reduces value because the buyer must plan for replacement.
Insurance Payer Mix Considerations
Optometry practices navigate two distinct payer systems: vision plans (VSP, EyeMed) for routine eye care and medical insurance for disease management. Vision plan reimbursement has been flat or declining, making practices heavily dependent on VSP vulnerable to margin compression. Practices that have successfully billed medical insurance for qualifying conditions generate 40-60% higher reimbursement per visit and are more valuable.