Why Pharmacies Get Better Multiples Than Small Medical or Dental Clinics

Regulatory licensing creates a barrier to entry. (You can’t just "open a pharmacy"—you need permits, and locations are restricted.)

Recurring revenue through scripts and aged care contracts creates stability.

Essential service: Even in recessions, people still fill prescriptions.

This lowers buyer risk and improves bank financing, making pharmacy businesses easier to sell at better multiples.

Banks love pharmacies. In Australia, the “Pharmacy Finance” products are some of the most aggressive lending terms available (sometimes 70–80% LVR, which is huge compared to general SME lending).

🚨 Important Catch: Pharmacy Ownership Rules (Australia)

In Australia, pharmacy ownership is restricted by law to registered pharmacists.

Non-pharmacists can’t own a pharmacy directly (though there are workarounds with management rights structures).

This narrows the buyer pool and sometimes limits auction-style bidding wars compared to other industries.

🧠 Quick Summary

Sector Typical Multiple Key Risk/Opportunity Factors

GP Clinics 1.0x–1.5x SDE Owner dependence, lease

Dental 1.5x–3.5x EBITDA Owner drilling vs. under management

Pharmacy 3.0x–5.0x EBITDA Location, script volume, regulatory licence

🎯 Final Word for Owners

If you own a small GP practice: Expect 1x–1.5x unless you build toward doctor independence.

If you own a dental practice: Lock in associates and systemise to push toward 3x+.

If you own a pharmacy: Stable scripts + good lease = very sellable business, often financeable at strong prices.

In every case, the question buyers are really asking is:

“Can I step into this business and make money without betting the farm on one person or one lease?”