Dr. Ben Chudner on Private Equity in Optometry, circa 2019

Discussion in 'ODwire.org TV & Radio' started by AdminWolf, Sep 4, 2019.

  1. AdminWolf

    AdminWolf Site Administrator & Tech Lead
    Staff Member

    13,893
    Messages
    Joined:
    Feb 24, 2001
    School/Org:
    University of Michigan Medical School
    City:
    Lake Oswego
    State:
    OR


    In this InSight Studio interview from Optometry's Meeting 2019 in St. Louis, Dr. Ben Chudner sits down with us to discuss private equity in optometry.
    He hits on:

    * What private equity is
    * The differences between different private equity groups
    * Where companies are looking to invest
    * What makes a practice an attractive target for private equity
    * Should your practice be acquired by private equity?

    Ask ben any questions in this thread!
     
    Ian Lane likes this.
  2. AdminWolf

    AdminWolf Site Administrator & Tech Lead
    Staff Member

    13,893
    Messages
    Joined:
    Feb 24, 2001
    School/Org:
    University of Michigan Medical School
    City:
    Lake Oswego
    State:
    OR
    Jeff Kiener likes this.
  3. Greg Luce

    Greg Luce ODwire.org Supporting Member

    3,320
    Messages
    Joined:
    Jan 8, 2001
    School/Org:
    PUCO
    City:
    Welches
    State:
    OR
    Nice overview guys. Financial, personal and professional. The tree pillars. Ben, you did not sell yourself or your group. Where are you guys in the spectrum that you speak of in term of models?
     
  4. Benjamin Chudner

    Benjamin Chudner Active Member

    383
    Messages
    Joined:
    Feb 9, 2005
    School/Org:
    UC Berkeley School of Optometry
    City:
    Victor
    State:
    NY
    Thanks for posting this Adam, although the screen grab above could be more flattering ;) I enjoyed participating and appreciate the kind words.
     
  5. Benjamin Chudner

    Benjamin Chudner Active Member

    383
    Messages
    Joined:
    Feb 9, 2005
    School/Org:
    UC Berkeley School of Optometry
    City:
    Victor
    State:
    NY
    Thanks Greg. My group is the last one I mentioned. We like to purchase a multi-location practice in a region first and use that as the brand in the area. We will then purchase additional practices in the area to build scale. If we purchase a practice with one or only a couple of locations, we will eventually rename those to match the larger brand in the area. Sometimes, we may keep the brand name of a smaller practice but add "Powered by [insert brand name here]".

    We may also purchase multiple single locations to enter a region or state. In that case, we will create a new brand name and use that as we acquire additional locations in the area. Our ultimate goal is to keep the practice DNA intact and not change too much that is patient facing other than to increase efficiency and improve patient care. We believe that patients have chosen our practices for a reason and to change that to conform to national brand guidelines would be a mistake. Also, we are not solely a retail play and encourage our doctors to practice to the highest scope allowed in each state we operate within. If that means adding instruments such as OCTs, TVFs, retinal cameras, etc, we will.
     
  6. Greg Luce

    Greg Luce ODwire.org Supporting Member

    3,320
    Messages
    Joined:
    Jan 8, 2001
    School/Org:
    PUCO
    City:
    Welches
    State:
    OR
    Thanks Ben, you seem to be in the right place and working a nice model. I wish you all the best. As I am thinking of a 10-15 year exit plan I will stay tuned in for now.
    I agree with the screen grabbing skills of our Admin
     
  7. Ken Elder

    Ken Elder ODwire.org Supporting Member

    16,244
    Messages
    Joined:
    Jan 6, 2003
    School/Org:
    SUNY College of Optometry
    City:
    Wallingford
    State:
    CT
    I’m not really considering selling my practice right now but I’ve always said....there’s definitely a number that will make me walk away.

    So if anyone wants to make an offer that knocks my socks off and three pairs out of my drawer, I’m all ears.
     
    Ed Makler and Benjamin Chudner like this.
  8. AdminWolf

    AdminWolf Site Administrator & Tech Lead
    Staff Member

    13,893
    Messages
    Joined:
    Feb 24, 2001
    School/Org:
    University of Michigan Medical School
    City:
    Lake Oswego
    State:
    OR
    Lol, sorry about that -- it was automated! I'll fix it when I land. Thanks again for doing this -- you are the straightest shooter I know when it comes to these issues, and we're lucky to have you around to answer questions about PE....
     
    Greg Luce and Benjamin Chudner like this.
  9. Tom Vaxmonsky OD

    Tom Vaxmonsky OD Well-Known Member

    3,284
    Messages
    Joined:
    Mar 12, 2009
    School/Org:
    Salus
    City:
    Marriottsville
    State:
    MD
    I'd love to hear if PE is doing anything much with retail practice purchases and if so valuations.
     
  10. Benjamin Chudner

    Benjamin Chudner Active Member

    383
    Messages
    Joined:
    Feb 9, 2005
    School/Org:
    UC Berkeley School of Optometry
    City:
    Victor
    State:
    NY
    Not that I know of. There really isn’t any value for PE in retail practices. There isn’t a lot of overhead that can be cut, they don’t purchase product other than CLs so it’s hard to increase margins, and the lease can be taken away and given to another practice.
     
    Tom Vaxmonsky OD likes this.
  11. Tom Vaxmonsky OD

    Tom Vaxmonsky OD Well-Known Member

    3,284
    Messages
    Joined:
    Mar 12, 2009
    School/Org:
    Salus
    City:
    Marriottsville
    State:
    MD
    What about taking the doctor from the situation if he/she owns the records, phone number and has in place a robust data and communication system with his patient base. Then setting up the practice strategically located with optical on the border of the non-compete?
     
  12. Benjamin Chudner

    Benjamin Chudner Active Member

    383
    Messages
    Joined:
    Feb 9, 2005
    School/Org:
    UC Berkeley School of Optometry
    City:
    Victor
    State:
    NY
    There’s really very little value in your records relative to an already established stand alone practice. I don’t believe any PE firm would want to invest in building up a private practice from records and a recall system, and if they did, they wouldn’t pay very much as they have to take on all the expenses of making such a transformation. You’d be better off taking your records outside the non-compete area and building up a business to sell. You’d get significantly more money as well as potential interest.
     
  13. James D. Williams O.D.

    James D. Williams O.D. Well-Known Member

    2,635
    Messages
    Joined:
    Jun 30, 2005
    School/Org:
    Pennsylvania College of Optometry
    City:
    Pilot Mountain
    State:
    NC
    MyEyeDr bought a very successful commercial practice located next door to a VisionWorks in my area. They opened a brand new MED a few miles away and used the practice's SolutionReach (or the like) to drive the message that the practice had moved. Rumor has it they paid over 7 figures.
     
    Tom Vaxmonsky OD likes this.