The acquisition model and multiple arbitrage

Independent community pharmacies transact at roughly 2.5–6x EBITDA, or 0.15–0.30x annual prescription revenue. Retail typically lands at 2.0–3.0x SDE, with PE consolidators paying 2.5–3.0x. Anchors in strong markets sit at the upper end of that range, and are worth it.

We structure each acquisition as a majority recapitalization with meaningful seller rollover. The owner takes chips off the table, continues operating the business he built, and holds platform equity for a second, larger exit alongside us. Rollover is requested in roughly two-thirds of PE transactions, typically 10–40% of consideration.

Scaled multi-state platforms with centralized operations and multi-state licensure command platform premiums, with 10–12x achievable at scale over a 5–7 year hold.

1. Roll them pari passu. Rollover behind a preferred stack with an accruing dividend can return roughly 1.1x at a modest exit even when the business performs. Every independent pharmacist knows the others through state associations and buying groups, so reputation among sellers is our deal flow. Generous, same-class, simple terms are the acquisition strategy.

2. We show the downside case ourselves. 30–40% of PE roll-ups underperform on integration, multiple compression, or dis-synergies. Multiple compression is specifically what breaks a seller’s second bite. Presenting it first is what earns trust from an owner who has been squeezed by PBMs for fifteen years.