Buying An Optometry Practice Australia Due Diligence

By Michael Stefanescu, 20 year optometrist who built, acquired and sold multiple practices · Designed for Freedom

Quick Answer (Featured Snippet target)

How do you buy an optometry practice in Australia? Work through five stages. Read the listing critically, run a buyer’s valuation with discount factors applied, complete 20 to 30 day due diligence across financial, operational, legal, clinical and market areas, structure the deal correctly with going concern GST treatment and appropriate restraints, then manage the first 12 months without destroying what you paid for. Most independent practices sell for 2.5 to 4 times normalised EBITDA. The structure matters more than the headline price.

Key Takeaways

Most independent AU practices sell for 2.5 to 4× normalised EBITDA plus stock and recent equipment. Multiples compress for owner dependent, single optometrist practices.
Due diligence is 20 to 30 days across financial, operational, legal, clinical, market and transition areas.
Seven red flags should kill any deal. No clean 3 year financials, recall data refusal, key staff leaving, lease under 24 months, ATO debt, ASIC notifications, AHPRA complaints.
2026 financing reality. 60 to 70% LVR against goodwill at 8 to 11% interest. Vendor finance at 20 to 40% over 3 to 5 years is common.
There is always another practice, but there is never another year of your life.

1. Why I wrote this from the buyer’s chair

I spent 17 years building optometry practices in Australia before becoming a seller in 2025. I started with a greenfield practice in Canley heights, NSW during the GFC, when every bank I walked into laughed at the proposal. I went on to acquire practices over the years that followed. One I almost bought and didn’t, and I credit that near miss for saving me from a very expensive lesson. One I did buy that I wish I hadn’t, and that experience rewired how I evaluated every deal after it.

The practice I wished I hadn’t bought looked fine on the surface. Revenue was real, the lease had four years left, the owner was affable and cooperative. What I didn’t look hard enough at was the recall list. The patient database was technically 4,200 active patients. When I dug into recent data post settlement, over 40 per cent hadn’t been seen in three years. The practice was running on fumes. The previous owner had been living off existing patients without investing in reactivation, and I paid full price for a database that was quietly dying.

2. Why buying an optometry practice in 2026 is different

The Australian optometry industry generated approximately $4.9 billion in revenue in 2025, with a modest sector CAGR of 1.2% from 2020 to 2025 (IBISWorld AU Optometry & Optical Dispensing). That aggregate number hides a structural divide that matters enormously to buyers.

Corporate consolidation is accelerating. Specsavers, EssilorLuxottica (OPSM and Laubman & Pank), and Oscar Wylee collectively dominate an increasing share of Australian optical retail. Specsavers reported 8.1% revenue growth in FY24-25. Independents in the same catchments are increasingly squeezed on price positioning and brand perception. That’s the competitive reality any buyer is buying into.

The ageing owner demographic is creating supply. A significant cohort of independent practice owners who started in the late 1990s and early 2000s are now in their 50s and 60s. Many didn’t plan their exit, didn’t build transferable systems, and are now selling practices that are effectively self employed jobs rather than genuine businesses. Supply is rising but quality is uneven. You need to be selective.

Financing has tightened. In 2026 conditions, business loans secured against goodwill typically come at 8 to 11% interest, with lenders requiring detailed servicing models and often wanting 30 to 40% equity contribution. The days of 90% LVR goodwill finance are behind us.

Valuation multiples are compressing in some segments. For owner dependent single optometrist practices with declining EBITDA trends, buyers are pushing multiples toward 2.0 to 2.5 times normalised EBITDA. Well systemised, multi chair practices with demonstrated growth are still commanding 4.0 to 4.5 times. The spread is widening.

Buying group membership changes the equation. A practice inside ProVision or Eyecare Plus carries buying group benefits, supplier relationships and marketing infrastructure. Confirm what transfers and on what terms before you price the deal.

3. How to read a listing, the 6 things sellers leave out

Most practices come to market through brokers, including firms like Optometry Practice Sales. Broker listings are marketing documents. They are not due diligence documents. Here’s what a listing typically presents, and what it leaves out.

Revenue without context. A listing might say ‘$1.1M annual revenue.’ What it won’t say is whether that figure is this year, last year or a three year average. It won’t tell you whether revenue is trending up or down or what drove any spike.
EBITDA that hasn’t been properly normalised. The gap between stated revenue and true normalised EBITDA is where most buyers get hurt. Owner add backs, related party costs run through the business, and irregular expenses all need to be identified and tested. A practice showing $200,000 net profit can have a genuine normalised EBITDA of $150,000 or $270,000 depending on how aggressively the current owner has managed expenses and add backs.
Owner clinical wage normalisation. If the owner is also the primary or sole optometrist, and they’ve been drawing $120,000 when a replacement senior optometrist would cost $125,000 base plus 12% super (total $140,000), the cost of replacing them is higher than the current books show. Conversely, if the owner has been drawing $220,000 from a practice where a senior optometrist costs $140,000, there’s $80,000 of add back. Both directions need verification.
Lease term remaining. Brokers bury this. A four year lease with no option is a four year practice. A seven year lease with a five year option is a 12 year practice. These are not comparable. Lease risk is the single item I’ve seen collapse more deals at late due diligence than anything else.
Equipment age. ‘Fully equipped’ on a listing could mean an OCT purchased three months ago or a slit lamp from 2009. Ask for the asset register with purchase dates. Equipment over seven years old without a replacement plan is a capital expenditure you’re inheriting, and it doesn’t show in the headline price.
Recall health. The active patient database number means nothing without recency data. Ask for a breakdown of patients seen in the last 12 months, 13 to 24 months, and 25 to 36 months. A healthy independent should have 60 to 70% of its patient base seen within 24 months. Anything materially below that is a deteriorating asset, not just a growth opportunity.

4. The 30 day due diligence checklist

Once you’ve executed a letter of intent, you typically have 20 to 30 days of exclusive due diligence. Here’s how to use every one of them.

Financial due diligence

Three years of signed income tax returns for the entity (not summaries, not management accounts, the ATO lodged returns)
Three years of monthly profit and loss statements verified against those tax returns
Business Activity Statement reconciliation. GST reported must match revenue. If BAS totals don’t reconcile with the tax return, that’s a red flag in isolation
Owner add back validation. Every add back claimed must have a corresponding transaction to verify (car, phone, travel, related party payments)
Owner clinical wage normalisation. Calculate the genuine market cost of replacing the owner as a clinician at current 2026 rates ($110,000 to $135,000 base + 12% super for a senior optometrist at an independent practice) more if the practice is open 6 or more days a week.
Working capital position. Accounts payable, accounts receivable, any outstanding supplier balances
Full debt schedule. Any ATO payment plans, equipment finance balances, lease liabilities

Operational due diligence

Patient file count and recency breakdown. 0 to 12 months, 13 to 24 months, 25 to 36 months, over 36 months
Recall list export showing patients due in the next 12 months and current campaign status
Dispensing rate. Percentage of consultations resulting in a new optical prescription dispensed in practice
Average Lifetime Value (ALV) calculation. A healthy independent AU practice sits between $1,200 and $1,800+ ALV. Below $800 indicates systematic under conversion or poor recall
Second pair conversion rate and contact lens penetration percentage
Chair utilisation by practitioner. Consulting hours booked versus available hours over the prior 12 months

Legal due diligence

Lease assignment terms. Does the current lease permit assignment to a new owner? What are the landlord consent requirements?
Supplier contracts and trading terms. Do they transfer automatically or require renegotiation?
Employment contracts reviewed under the Health Professionals and Support Services Award (HPSS Award MA000027). Check all staff classifications, pay rates, entitlement accruals
Restraint of trade clause. How long, what radius, is it enforceable? A restraint that’s too broad may not be worth the paper it’s on. Too narrow and the seller is consulting next door in 12 months
ASIC records. Any adverse company notices, personal insolvency history for the principal director
AHPRA notifications history for any optometrists currently employed, including the selling owner

Clinical and regulatory due diligence

Medicare provider numbers. Confirm they’re current, not suspended, and that the practice based billing number transfers correctly under the new entity
Private health insurance contracts. Are contracts registered to the practice or to the individual optometrist? This affects whether they transfer on settlement
Equipment service records for all major items. OCT, phoropter, slit lamp, visual field analyser, fundus camera
Sterilisation logs and infection control compliance certificates
Any current complaints or investigations with the Optometry Board of Australia

Market due diligence

5 km catchment population. Is it growing, static or declining? (ABS Census and local council planning data)
Competitor density. How many optometry practices within 3 km? Is a Specsavers or major chain opening?
Demographic match. Does the current patient base match the demographic of the catchment? A practice serving an ageing demographic in a gentrifying suburb may face headwinds
Lease location strategic risk. Is the shopping centre or street address likely to remain viable over the next five to ten years?

Transition due diligence

Key staff retention probability. Have a candid conversation with each long tenure team member (once the owner has consented and introduced you)
Owner clinical handover plan. How many days per week will they remain post settlement, and for how long? Get this in writing in the contract
Supplier relationship transfer. For any relationship dependent supplier accounts (frame rep relationships, lens lab preferential pricing), confirm what happens at change of ownership

5. How buyers actually value an Australian optometry practice

For the full methodology on practice valuation, I’ve written a dedicated guide at the valuation guide. Here’s the summary with the buyer’s discount factors added.

The base formula is.

Practice value = Normalised EBITDA × Multiple + Stock + Recently purchased equipment

In Australia in 2026, independent practices typically sell for 2.5 to 4.5 times normalised EBITDA, with the average sitting around 2.8 to 3.5 times (Optometry Practice Sales, Insight News). That’s the starting point. As a buyer, your job is to assess what discount factors apply.

Apply a downward adjustment to the multiple for each of the following.

Discount factor	Why it matters
Customer concentration above 20% from any single source	Referral relationship transfers to you imperfectly, if at all
Owner clinical hours above 60% of total consulting hours	Owner dependent practice loses revenue when owner exits
Lease under 3 years remaining with no option	Practice may need to relocate. Relocation costs money and loses patients
EBITDA declining year on year	A 3 year declining trend deserves 2.0 to 2.5×, not 3.5×
Equipment over 7 years old without replacement plan	Add the capex estimate to your first year cost model
No second optometrist redundancy	Single optometrist with owner as that optometrist = highest key person risk

6. The 7 red flags that should kill any deal

These are non negotiable. If you see any one of these, your default position should be to walk unless the seller can provide a satisfactory, verified explanation.

No clean three year financial history. The seller cannot produce three years of ATO lodged income tax returns for the entity. Summary P&Ls from a bookkeeper are not a substitute. No bank will lend against an unverified income stream, and neither should you.
The owner refuses to share recall data. The recall list export is the most direct measure of the practice’s pipeline. An owner who won’t share it is either hiding a deteriorating database or has never run a meaningful recall system. Either way, you’re buying a different asset than what’s being described.
Key staff are already leaving. You discover during operational due diligence that the practice manager or a senior optometrist has already resigned or given notice. Staff who knew this sale was coming and chose to leave before settlement are telling you something the seller isn’t.
Lease expires within 24 months without a renewal option. Not negotiable. Even if the landlord has informally indicated they’ll renew, an unsigned lease commitment is not an asset. Require a signed lease renewal or extension as a condition of settlement.
ATO debt. Any outstanding ATO debt, including payment plans, attached to the entity transfers risk to the transaction and potentially to you if structured as a share sale. Get full ATO clearance letters as a settlement condition.
ASIC notifications or adverse company history. Director disqualifications, previous company insolvencies, or creditor arrangements in the selling entity or related entities need full disclosure and legal review.
AHPRA complaints history on the principal optometrist. A complaint or conditions notation on the selling optometrist’s AHPRA registration affects patient trust, staff morale, and potentially the practice’s Medicare standing. It’s also a due diligence disclosure failure if the seller didn’t raise it proactively.

7. Financing the purchase in Australia, 2026

Getting the deal financed requires understanding the landscape as it actually exists in 2026, not as it existed in 2019. This section is general guidance, not financial advice. Speak with a finance broker who specialises in healthcare before committing to any structure.

Bank business loans secured against goodwill remain the primary financing mechanism for independent buyers. In 2026 conditions, lenders are typically offering 60 to 70% LVR against the assessed goodwill value, at interest rates of 8 to 11% depending on the borrower profile, security offered, and the specific lender. The bank will want three years of clean practice financials, a personal financial statement, and a servicing model showing the loan can be repaid from practice cash flow after expenses.

Vendor finance at 20 to 40% of the purchase price over three to five years at an agreed interest rate has become increasingly common as bank lending criteria tighten. It aligns seller incentives with buyer success during the transition. Negotiate the rate, the security (usually a caveat or charge over practice assets), and the consequences of default clearly upfront.

Equity partnership with another optometrist can reduce the individual capital requirement, but introduces partnership complexity. Governance, decision making rights, exit triggers, and buy sell provisions need to be documented from day one, not resolved later under stress.

Family or trust loan structures can be tax efficient but need to meet ATO arm’s length requirements to avoid deemed dividends or other adverse tax outcomes. Get proper accounting advice on any intra family or trust to entity loan arrangements.

SMSF restrictions. Self managed superannuation funds cannot purchase a business from a related party under typical circumstances (non arms length transaction rules). The rules are complex. If you’re considering using super to fund or partially fund the purchase, get an SMSF specialist’s written advice before proceeding.

8. Deal structures and what they really mean

Asset sale versus share sale. Most Australian optometry practice transactions are structured as asset sales. The buyer purchases the goodwill, equipment, stock, patient list and the lease assignment, but doesn’t acquire the selling entity itself. This protects the buyer from historical liabilities within the company. A share sale is less common but occasionally used where Medicare provider numbers or PHI contracts are held by the company and are not straightforwardly transferable to a new entity.

Going concern GST exemption. If the practice is sold as a going concern (it continues operating, the seller provides everything necessary for continued operation, and both parties agree in writing), GST is not payable on the transaction. This is the standard structure and saves the buyer 10% on the purchase price. Confirm the going concern conditions are met. The seller’s accountant and yours both need to sign off on this treatment.

Holdback for working capital. A portion of the purchase price (typically 5 to 10%) held in trust for 60 to 90 days after settlement, released once final accounts are prepared and agreed. Protects the buyer from inventory discrepancies or accounts payable surprises discovered post settlement.

Earn out conditions. A portion of the purchase price contingent on revenue or patient retention targets in the 12 months post settlement. Can be appropriate when there is genuine transition risk, but become contentious if the conditions aren’t precisely defined. If an earn out is proposed, get a lawyer to draft the measurement methodology before you agree to it in principle.

Restraint period. The seller agrees not to operate a competing practice within a defined radius for a defined period. In Australian courts, restraints that are unreasonably broad in geography or duration may not be enforced. Aim for the minimum restraint that genuinely protects the goodwill you’re paying for, not the broadest possible clause.

Transition consulting agreement. The seller stays on as a consulting practitioner for a defined post settlement period. Price this appropriately. If the seller is working clinical days, they’re worth market rate. If they’re purely transitioning patient relationships, a lower consulting fee over three to six months is more typical.

I want to be direct here. The deal structure section of any practice acquisition is where you need a specialist commercial lawyer and a healthcare accountant. Not your family solicitor. Not your general practice accountant. The tax consequences, liability protections and contract mechanisms in optometry practice sales are specific enough that generalist advice creates real risk. Budget for it.

9. The first 12 months as new owner, what most buyers get wrong

The deal is done. Settlement has occurred. Now the real work begins. And this is where I’ve seen buyers who did everything right in due diligence undo the value they paid for.

Changing too much too fast. Patients chose this practice for specific reasons. Familiarity, location, relationships with staff. The first three months are not the time to rebrand, restructure the fee schedule, or replace the dispensing range. Observe first. Change with evidence, not enthusiasm.

Not retaining key staff. The front of house team IS the patient relationship for many long tenure patients. If the practice manager of eight years leaves in month two because you changed rostering arrangements without consultation, you’ve lost more than a staff member. Create retention conversations early, not after the attrition.

Ignoring recall. In the first 90 days, the single highest return activity is activating the recall system for patients due. These patients already have a relationship with the practice. They already trust the location. Getting them back in generates revenue from the asset you purchased. Owners who focus on new patient acquisition before reactivating existing patients are leaving cash on the table.

Neglecting the seller’s transition role. If you’ve contracted the seller to be present for 60 to 90 days post settlement, use that time aggressively. Get introductions to key referring GPs. Have them walk you through the frame buying relationships. Understand which patients they’re personally concerned about from a clinical continuity perspective. That knowledge does not exist in any document.

For more on the transition from clinician to business owner, see The Operator to Owner Playbook for Australian Optometrists, and for the underlying numbers see Optometry Practice Profit Margins Australia.

10. When to walk away

I’ve walked away from more deals than I’ve done. That’s not a failure of nerve. That’s professional discipline.

The deals I walked from share common features. Sellers who were defensive about financial data, practices where staff were disengaged, buildings where the landlord’s behaviour during due diligence already felt adversarial. In each case, the discomfort I felt during due diligence was a signal, not a negotiating tactic.

The practice I almost bought in regional NSW, one with the hidden ATO debt, would have consumed 18 months of my energy to resolve. The practice I did buy that I wished I hadn’t, the one with the deteriorating patient database, has taken two years to fully recover, and cost far more than the price discount I should have demanded, or the price I should have walked from entirely.

The principle I’ve come to. There is always another practice, but there is never another year of your life.A deal at the wrong price with the wrong structure in the wrong practice is not a business acquisition. It is a liability you’ve paid a premium for.

The market will always have another practice coming to market. Corporate consolidation, ageing owner demographics, and financial pressure are creating supply continuously. If this one has red flags and the seller won’t address them, the right answer is to thank them for their time and move on.

You do not need this specific practice. You need the right practice.

11. Frequently asked questions

How much does it cost to buy an optometry practice in Australia in 2026?

Most independent Australian optometry practices sell for 2.5 to 4.0 times normalised EBITDA, plus stock at cost and any recently purchased equipment. For a practice with $150,000 normalised EBITDA, that’s a goodwill range of $375,000 to $600,000 plus stock and equipment. Revenue based cross checks typically put values at 60 to 80% of annual gross revenue. Practices in the $500,000 to $1.2M revenue range are the most common transaction size for independent buyers.

What is due diligence and how long does it take?

Due diligence is the period of verified investigation between signing a letter of intent and exchange of contracts. You’re confirming that everything the seller has represented is actually true. Typically 20 to 30 days for an optometry practice transaction. Use the checklist above to structure it.

Can I use my superannuation to buy an optometry practice?

In most circumstances, you cannot use SMSF funds to buy a business from a related party, and the rules around using super to fund any business acquisition are complex. Get written advice from an SMSF specialist accountant before proceeding in any form. General financial advice disclaimers apply.

What is vendor finance and is it common in optometry practice sales?

Vendor finance is where the seller allows the buyer to pay a portion of the purchase price (commonly 20 to 40%) directly to them over an agreed period, typically three to five years, at an agreed interest rate. It’s common in Australian optometry transactions, particularly when bank lending is constrained or the buyer has equity constraints. It aligns incentives during the transition period.

How do I know if the asking price is fair?

Calculate your own normalised EBITDA from the tax returns and apply Australian market multiples of 2.5 to 4 times. Then apply the buyer’s discount factors described in this guide. If the asking price sits at or below your adjusted valuation, the conversation is worth having. If the asking price is above your adjusted valuation and the seller won’t negotiate, test whether a lower price is achievable or move on.

Does GST apply to the purchase of an optometry practice?

Not if the transaction is structured as a going concern, which is standard for most optometry practice sales. Both parties must agree in writing that the going concern conditions are met. Confirm this with both your accountant and the seller’s accountant before settlement.

What should I look for in a lease assignment?

The lease must be assignable (check the lease deed), the landlord must consent (get this in writing before settlement, not after), the remaining term should be at least three years with a meaningful option, and the rent should be at or below market. If the landlord requires a personal guarantee, understand what you’re guaranteeing before you sign.

Should I use a broker or negotiate directly with the seller?

For most transactions, a broker is involved on the seller’s side regardless. Having your own independent advisor, either a commercial lawyer familiar with healthcare transactions or a specialist business broker representing your interests, is worth the cost. The seller’s broker represents the seller’s interests. Someone needs to represent yours.

12. A final word

If you’re seriously looking at buying an optometry practice in Australia and want an experienced second set of eyes on the deal, including the numbers, the structure, and the operational reality, that’s exactly what I work through with buyers inside my coaching programs.

I’ve been on both sides of the table more times than most. I know what a good deal looks like and, more importantly, I know what a bad deal looks like when it’s wearing a good deal’s clothing.

If that kind of outside perspective would be useful, visit michaelstefanescu.com to explore how we can work together.

About the author

Michael Stefanescu is an Australian optometry business coach and former multi practice owner. He spent 17 years as a practising optometrist and built, scaled and sold his own practices in Sydney. He now coaches independent Australian optometry owners through the systems, marketing, financial and operational frameworks that build profitable, sellable practices. Read more about Michael or apply for the $1M Optometry Business Accelerator.

Sources and further reading

Tagged optometry due diligence, optometry practice for sale Australia, optometry practice purchase, optometry practice valuation buyer

Buying an Optometry Practice in Australia: The 2026 Buyer’s Due Diligence Guide