Preserving practice independence

Across the UK, veterinary practices considering their ownership succession are facing one of the biggest shifts in decades.

As consolidation by large corporates and private equity groups has increased over the past few years, a growing number of independent practices are exploring a different path of ownership succession: one that protects their people, purpose and independence.

Experience of late shows an increasing number of veterinary practices are now choosing to sell to an employee ownership trust (EOT) rather than to a consolidator.

The changing landscape of veterinary practice ownership

In aggregate, it is estimated that up to 60% of UK vet practices are now owned by large corporate groups and private equity-backed operators, compared with as low as 10% in 2013¹. While these deals can provide owners with a quick exit, they often come with downsides: loss of independence and the practices’ culture and values, earn-out clauses for sellers, increased uncertainty for staff which can sometimes include redundancies, and disgruntled clients when prices rise and service quality sometimes declines.

The Competition and Markets Authority (CMA) launched a formal market investigation [now concluded] into the veterinary services sector in May 2024, citing concerns that consolidation may lead to reduced choice, higher prices, and the impact on local communities.

As scrutiny increases, selling to a big consolidator is becoming riskier and more complex, and more practice owners are asking: does a better way to secure our future exist?

Why EOTs are gaining popularity among veterinary practices

A sale to an EOT allows a practice to transfer ownership to a safe, sustainable entity that owns the shares in the company for the benefit of its employees.

The board of directors continues to run the business as normal, with the newly created EOT trustees ensuring that decisions are taken in the best interests of current and future employees while securing the long-term future of the business. The hard work of people in the practice generates profit and they ultimately share in that profit.

The process enables a full or partial ownership exit for the current owners on a timeline of their choosing, while keeping the practice independent, values-led, and rooted in its community.

The EOT model is gaining traction in the veterinary world for many other reasons, too.

Protecting independence: employee ownership safeguards the ethos, relationships and reputation the practice has built over the years, rather than passing control to an external investor.

Smooth transition: for practice owners, a great deal of certainty exists around the transition to the EOT without the need for complex negotiations or last-minute changes under pressure. While the EOT may create the opportunity for additions to the senior leadership team – especially if founders or sellers opt to reduce their input or even step back completely – for the practice team, no change needs to be made in the practice culture or values, other than an appreciation that their interests are a key driver in how the practice is managed. In reality, the EOT model often most appeals to those practices where employees are already valued and consulted.

Empowering your team: staff have a real stake in the practice’s success, which supports retention, motivation and continued great service for clients. Research by the Employee Ownership Association suggests that employee-owned businesses are 8% to 12% more productive, and invest more in their people and innovation. The potential for tax-free profit-based bonuses in addition to a commercial salary, as well as the employee centred ethos and long-term stability, are significant draws when it comes to recruitment.

Phased and flexible exit: owners can gradually step back from the practice on their own terms while ensuring a seamless handover to new managers, which is sometimes over the course of many years. This allows for plenty of time and space to coach and mentor those stepping into leadership roles. It also means the opportunity still exists to progress within the practice; directors are still needed to make operational and strategic decisions.

Financially rewarding and tax efficient: the EOT structure can offer significant tax reliefs, with sellers paying 0% capital gains tax on the sale of their shares to an EOT, and income tax-free bonuses are available for employees right from the start.

Long-term stability: management structures can remain as they are as, operationally, a sale to an EOT is by far the path of least disruption. The EOT plays a monitoring and governance role, holding the people running the practice accountable, but not interfering in day-to-day decision making.

Real life examples

A number of UK practices have transitioned to employee ownership in the past few years, including Donald S McGregor and Partners, Moray Coast Vets, and Pennard Vets. They are proving that the EOT route works in practice: providing fair value for outgoing owners, strengthening culture and giving teams a meaningful stake in the future.

Employee ownership can offer a real alternative to corporate consolidation: one that protects independence, empowers teams and sustains trusted relationships at the heart of every veterinary practice. For practice owners evaluating succession plans, an EOT is one option that allows them to exit on their own terms – with their people, clients, and purpose at the centre of it all.

Reference

1. Ring S et al (2025). UK vets face price caps after competition review, Financial Times, tinyurl.com/mvpa4rmj