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 pay significantly more than private OD-to-OD transactions.
Private Buyer Valuation (OD to OD)
When one optometrist buys another's practice, the standard metric is 43-75% of annual revenue, or equivalently 2.0-3.5x SDE. A practice generating $1.2M in revenue would sell for $516K to $900K to a private buyer. The percentage depends heavily on profitability, optical dispensary performance, medical vs. routine vision mix, and patient panel size.
The wide range (43-75%) reflects significant variance in optometry practice economics. Practices with strong optical dispensary revenue and 30%+ medical eye care (treating glaucoma, macular degeneration, dry eye) trade at the higher end. Practices that are primarily routine eye exams with minimal optical sales fall toward the lower end.
PE/Corporate Buyer Valuation
PE-backed consolidators evaluate optometry practices on EBITDA, typically paying 3-6x EBITDA for add-on acquisitions and 6-8x EBITDA for practices that qualify as sub-platforms or high-value targets. A practice with $1.5M revenue and $300K EBITDA could sell for $900K to $2.4M to a PE buyer. However, PE buyers have specific criteria — not every practice qualifies.
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.