You raise some good points here, I hold AFL, and it is going...

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thebigbadbear

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19/11/19

15:28

Post #: 41510376
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Originally posted by Motoracebeerguy: ↑

Buying practices regularly is probably not an easy task. There are a lot of small operator practices out there where the owners make a decent wage but not much more hence not suitable. If your practice has scale and profitability what is the compelling reason to sell.

Lack of succession is one reason which I get, so applicable if retirement looms however if you have a successful practice and you are not looking to retire would you cash it in and then go back to working for "the man"?

I saw a similar model fail for Primary Health Care back in the day. Sure there was some that worked but the majority couldn't wait to get out once their escrow period expired (5 years in Primaries case). A lot of the original sellers left the business and re established themselves down the road whilst thanking PRY for the capital injection.

Im not suggesting there isn't any but it is not as easy as rolling up with a cheque book. Perhaps the establishment of new practices is just as viable in new growth areas. Obtaining suitable practitioners and then building the client base then becomes key. Slow burn as opposed to instant results.

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You raise some good points here, I hold AFL, and it is going about a similar strategy.. but in a different sector.. The last firm they bought was due to the vendors retiring. Most vendors are also not stupid and know how much they can sell a better quality business for... so then you end up with a stand off.. Nice to see HLA recover back to IPO price... was tempted to buy some in the 80s but cant pull the trigger due to the amount of medical roll up flops

HLA Price at posting: 99.5¢ Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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