PHARMACY APPRAISAL$ ONLY provides reality-based, fair market values for community pharmacies of all sizes and practice settings.

PHARMACY APPRAISAL$ ONLY

overview

Appraising an independent community pharmacy in today’s rapidly evolving environment creates a number of challenges and issues that did not merit consideration ten years ago. While certain basic financial measures are universal when appraising a business, criteria such as gross revenue, gross profit, appropriate add-backs, and non-recurring revenue, all of which help determine EBITDA, the current world of pharmacy requires specific knowledge of the pharmacy practice environment in order to develop an accurate, up-to-date fair market value (“FMV”).

With the evolution of so many new business models and corresponding opportunities for pharmacy owners to generate revenue, the word “sustainability” has become critical in determining FMV. To accurately appraise a pharmacy, regardless of the rationale/need for an appraisal, an appraiser must possess an intimate knowledge of these new programs, what they mean in terms of operational requirements, staffing, other capabilities and requirements in order for pharmacies to exploit those opportunities.

Traditional business appraisers come primarily from the world of accounting, and are usually focused on the basic, generic accounting principles used for many years to determine business value. At PharmacyAppraisalsOnly.com, we apply these principles and then go to the next level, analyzing provider trends, current and pending regulatory changes, payor trends, manufacturers’ special programs and government support programs, all of which can impact significantly on the FMV of an independent community pharmacy.

PHARMACY APPRAISAL$ ONLY

process

In order to provide a detailed and accurate valuation of a community pharmacy, the following steps are taken by the appraiser:

• A review of photos of the pharmacy (or a site visit when appropriate/necessary), and a review of the local marketplace demographics is conducted.

• An evaluation is made of the local competitors, to assess the strengths and weaknesses of the competition.

• The current lease (or proposed lease, in the case of owner-occupied properties) is reviewed by the appraiser.

• A detailed review of three years’ financial statements and/or tax returns is conducted. This includes a review of the balance sheet and the pertinent financial ratios.

• A review of current prescription department activity is conducted, to ascertain the Rx product mix, Rx department profitability and other factors that impact on overall pharmacy value.

• All financial details are analyzed and compared with industry standards on both a local and national basis.

• A review is conducted of comparable sales made in both the local and national markets.

Subsequent to these activities, the appraiser then uses four methods to evaluate the pharmacy, averaging those to determine a final fair market value for the business. Those methods are:

• Use of comparable sales of independent pharmacies in the local market.

• Use of formulas applied by corporate buyers when purchasing RX files.

• Use of a multiple of EBITDA (after removing all non-recurring expenses) that is applied by most lenders and financially motivated purchasers.

• Use of gross margin plus net asset value.

This process results in the production of a fully documented appraisal which can be used for partnership and stockholder agreement valuations, IRS queries as to pharmacy valuation for a variety of tax and estate reasons, exit and estate planning activities and any legal disputes where the value of the pharmacy is a component of the dispute.

PHARMACY APPRAISAL$ ONLY

experience

Tony De Nicola currently serves as President of PharmacyAppraisalsOnly.com, which was formed in 2020 to focus on providing objective, fair market value appraisals of independent pharmacies in all practice settings. In 2000, Tony founded Buy-sellapharmacy.com, a Connecticut-based consulting firm that addresses the issues of buying and selling independent pharmacies throughout the country. The firm has provided objective advice and input to pharmacy owners and prospective owners on the issues that surround effective transition planning, development of an exit strategy for existing owners and the purchase of a pharmacy for first-time buyers, as well as existing owners who wish to acquire another pharmacy. To date, Buy-Sell has managed more than 500 successful transactions and evaluated/appraised an additional 250 pharmacies for various purposes.

Prior to founding Buy-sellapharmacy.com in 2000, Tony spent 15 years managing an international consulting firm, A & D Associates, which advised wholesalers and retailers around the world on various network marketing activities. In the mid-80’s, Tony served as Chief Operating Officer of Ketchum Distributors, a $300 Million dollar regional wholesaler based in Clark, New Jersey, the U.S.’s 12th largest at that time. In 1974, he founded the Legend Pharmacy Cooperative, the country's first national retail pharmacy buying group. Legend grew to a membership of more than 1000 pharmacies in 20 states during his thirteen-year tenure as Executive Director.

Tony graduated as a pharmacist from St. John's University in 1962. He was the owner and operator of a small chain of independent pharmacies in the New York suburbs until 1980, at which time he sold the company to concentrate on the development of the Legend network. Tony is a member of numerous pharmacy trade organizations encompassing many different practice settings and has served as a Director and/or Advisory Board member of a number of healthcare companies, both domestic and international.

PHARMACY APPRAISAL$ ONLY

why appraise?

Who needs a fair market value appraisal of a pharmacy and why do they require one?

• A pharmacy owner who is preparing to sell their pharmacy, or is already engaged in negotiations with prospective buyers.

• A pharmacy purchaser who is considering purchasing an independent pharmacy.

• A lender, financial institution, pharmaceutical wholesaler or investor, who plans to finance the purchase of an independent pharmacy.

• An attorney who requires a fair market valuation of a pharmacy for any legal dispute between shareholders, spouses or suppliers.

• An accountant who is preparing an estate tax return that requires a time-of-death valuation in order to complete the filing process.

Our appraisals have been accepted in all of the above-described situations and have withstood the scrutiny of the courts and, in some cases, the IRS as well.

PHARMACY APPRAISAL$ ONLY

fees & delivery

• Appraisal Fee - Delivered in fourteen days - $5,000.00

• Expedited delivery – Delivered in seven days - $6,000.00

• Express delivery – Delivered in three days - $7,500.00

We accept payment by check (mail to: 25 Town Hill Road, Warren, CT 06754), Venmo (@Tony-Denicola), Paypal (Tony501@aol.com) or call 860-868-1491 or text 917-573-5292 for additional information or wire instructions.

PHARMACY APPRAISAL$ ONLY

references

The length and breadth of Tony DeNicola’s experience in the world of pharmacy creates a unique set of qualifications as an appraiser and evaluator of community pharmacies. During the course of a 60 year career he has been a pharmacy owner/retailer (owned two stores on Long Island for 25 years), a buying group leader (founded and managed the Legend Pharmacy Cooperative, one of the first of its kind in the country), was chief operating officer of a $300MM pharmaceutical distributor (Ketchum Distributors, based in New Jersey, the 12th largest wholesaler in the country during his tenure as COO), had a 15 year stint as a consultant to retailers and distributors throughout the country and in select overseas markets (A & D Associates, an international marketing consultancy), subsequent to which, since 2000, he founded and managed Buy-Sellapharmacy.com, the country’s only pharmacy-specific brokerage that operates in all fifty states, has completed more than 500 transactions during the past 20 years.

Click HERE for a personal reference list who can speak to Tony’s qualifications.