Valuation Sciences • Arizona OD Practices

Expert Optometry Practice
Valuation Services

A practice valuation is not a number — it is an argument. Lumina Medical Capital constructs the defensible, buyer-committee-ready valuation report that commands institutional multiples in the Arizona optometry acquisition market.

Intelligence Report — Node 02

Why Valuation Quality Determines Transaction Outcome

Lumina Medical Capital has observed a consistent pattern across hundreds of Arizona optometry transactions: the practices that transact at the highest multiples are not necessarily the most profitable. They are the practices whose value was most precisely and persuasively documented before the buyer's capital committee ever opened the file.

A retail broker's practice estimate — derived from a revenue multiple applied to gross collections — is not a valuation. It is an opening position that a sophisticated institutional buyer will systematically dismantle during due diligence. The result is valuation erosion: the gap between what an OD believed their practice was worth and what the buyer's underwriting team will actually fund.

Lumina's valuation methodology eliminates this gap. We construct the analysis from the same analytical framework a DSO, private equity fund, or institutional lender uses to evaluate the acquisition — which means the number we deliver is the number that survives due diligence intact.

Methodology Architecture

Three Valuation Methodologies. One Defensible Conclusion.

Lumina applies all three recognized healthcare practice valuation approaches and triangulates them against Maricopa County transaction comparables. The result is not an estimate — it is a position.

Method I

Income Approach (DCF / Capitalization)

The institutional standard. Adjusts practice EBITDA for owner compensation normalization, one-time expenses, and non-recurring revenue events. Applies a capitalization rate derived from risk-adjusted market data — producing the going-concern value that buyers use to structure their capital commitment letters.

Method II

Market Approach (Transaction Comparables)

Benchmarks your practice against a curated dataset of closed optometry transactions in Maricopa County, Pima County, and select national comparables — adjusted for size, market, payer mix, and equipment modernity. Validates the income approach conclusion and identifies any applicable Scottsdale corridor premium.

Method III

Asset Approach (Adjusted Net Asset Value)

Catalogs and appraises all tangible and intangible assets: equipment at fair market value, leasehold improvements, patient records and goodwill, covenant not to compete value, and the working capital baseline. Provides the floor value that establishes the minimum defensible transaction price.

Value Architecture

The Twelve Variables That Determine Your Multiple

Optometry practice valuation is not a single-variable equation. The EBITDA multiple applied to your practice is the composite product of twelve weighted variables — each of which Lumina quantifies, benchmarks, and presents within the valuation report.

Understanding where your practice scores on these dimensions — and which variables can be improved before going to market — is the difference between transacting at 5.5x and transacting at 8.2x.

Premium Drivers (+)
High cash-pay optical revenue
Associate OD on staff
Tenured, non-owner staff
Modern diagnostic equipment
Long lease with renewal options
Clean, growing A/R
Discount Factors (−)
Single-doctor dependency
Short or expiring lease
High Medicaid / HMO mix
Aging equipment slate
Declining patient retention
Deferred leasehold maintenance
Lumina Valuation Report: Deliverables

What every Lumina institutional valuation report contains — and why each component matters to a buyer's capital committee.

01
Three-Year Normalized Income Statement

Owner add-backs, one-time adjustments, and EBITDA reconstruction

02
Payer Mix Analysis & Revenue Quality Score

Benchmark against Scottsdale corridor peers

03
Transaction Comparables Database Extract

Closed AZ optometry transactions, adjusted for comparability

04
Equipment Fair Market Value Schedule

Current replacement cost vs. book vs. FMV by instrument

05
Multiple Sensitivity Table

Value range across 4.5x–9.5x EBITDA with variable assumptions

06
Recommended Transaction Structure Matrix

Three capital structures ranked by seller net proceeds at close

07
Value Enhancement Roadmap (12–24 month)

Specific actions ranked by ROI impact on exit multiple

Initialize Valuation Engagement

Strategic Timing

When to Commission a Practice Valuation

The most costly mistake in practice transitions is treating valuation as a transaction prerequisite rather than a strategic instrument.

3–5 Years Before Exit

The Value Enhancement Baseline

Commission a valuation now to identify exactly which variables are suppressing your multiple. A 24-month value enhancement program — hiring an associate, adding OCT billing, renegotiating the lease — can add $400K–$1.2M to your eventual transaction value. You cannot optimize what you have not measured.

12–18 Months Before Exit

The Pre-Market Valuation

Establishes your negotiating position before buyer engagement begins. Defines the floor below which you will not transact. Allows time to address identified discount factors before the practice is exposed to the market. This is the most commonly deployed Lumina engagement.

Upon Unsolicited DSO Approach

The Counter-Intelligence Valuation

When a DSO or PE platform makes an unsolicited acquisition inquiry, they have already completed their internal valuation of your practice. You are negotiating blind without yours. Commission a Lumina valuation before you enter any discussion — before any LOI, before any NDA.

Partnership Buyout or Dispute

The Neutral Arbitration Valuation

When partners disagree on practice value — whether in a planned buyout or contested dissolution — an independent institutional valuation by Lumina provides the defensible, methodology-documented conclusion that prevents litigation and enables structured resolution.

Related Intelligence
OCT & Diagnostic Equipment Capital — Valuation Multiplier Analysis
Access Report
Institutional Valuation Report

Know the Number.
Own the Negotiation.

The OD who enters a transaction without an institutional valuation is negotiating against a buyer who has one. Lumina equalizes that asymmetry — with a report that holds up under the scrutiny of any capital committee in the DSO or PE acquisition universe.

Initialize Practice Equity Assessment

10-business-day delivery. Institutional NDA. No obligations.