If you own an aesthetic/medspa practice and are thinking about selling, you likely have
questions about who the potential buyers could be. As the demand for cosmetic procedures
continues to grow, buying an aesthetics business can be an attractive investment for some.
Here are a few types of buyers that may be interested in acquiring the business you’ve built:
Other Doctors
One obvious option is selling your practice to another small business owner or group of
physicians. Once the dominant form of practice transition, financing rates and a more
challenging business management environment have often relegated this a secondary option.
In addition, provider-to-provider transactions often depress the value of the asset you’ve spent
your life building and shortchange the upside opportunities that other means of transition may
offer. Still, it can’t be discounted too much as a transaction with another provider can be
reasonably seamless with minimal downside risk attached.
Private Equity Firms
In recent years, private equity firms and other investment companies have been aggressive
buyers in the healthcare sector. For them, healthcare services represent a profitable
investment opportunity. A medical aesthetics practice with consistent revenue, patient
membership programs and growth potential makes for an attractive acquisition target. These
buyers may be willing to pay a premium purchase price. However, they will also want to see a
return on their investment. In general, your commitment to the practice post close will range
from 3-5 years and you’ll be partially responsible for helping to drive practice profitability and
maintain your business through the entirety of your employment agreement. This is likely the
largest return on investment you could attain for your business and you’ll have numerous
buyers to choose from. The key in this scenario is to understand who the available buyers are,
what their investment thesis looks like, how they intend to grow, whether they’ve handled
provider driven office-based healthcare investments previously and what their level of success
has been. Pedigree is incredibly indicative of future performance and the waters are murky
when defining what that performance will look like. You need to be partnered with a firm that
can help you navigate those waters and navigate the numerous opportunities in front of you.
Large Group Practices
Pre-private equity groups are often looking to add to their numbers either as a hedge against
larger PE backed entities, or in preparation for an eventual exit as a private equity platform. In
many cases, this is the riskiest of options on the board as it puts you in the position of making a
significant life decision about your largest asset, with the least amount of information specific
to future ownership. While the upside can be substantial, ultimately the outcome will be up to
whomever is running the large group practice. Understanding the long-term goals and funding
needs of the organization are key in a transaction of this kind, as is the decision making protocols
surrounding future decisions.
Multi-Specialty Practices
As consolidation continues, we are beginning to see a significant graying of the lines between
Plastics, Aesthetics and Dermatology. More and more plastic surgeons are incorporating
medspa services into their offering, trying to capture some of that revenue within their four
walls. Dermatologists have long included medspa services, many of which are becoming more
pronounced than many of the core dermatological services traditionally offered. Medspa’s are
looking to incorporate more and more laser-driven services traditionally found in a plastics or
derm practice. With these graying of traditional lines, we are seeing a larger and larger
presence of multi-specialty businesses looking to bolster profitability and increase their referral
network. PE or debt backed, these organizations are always looking at adding to their numbers
and extending the boundaries of their service offerings. At best, this provides a cohesive
environment for collaboration, referral, centralized service offerings (back office) and market
dominance. At worst they can lack clear direction and vision, poorly cannibalize their own
provider networks, and lack the efficiencies gained by a concise mission, vision and values belief
system.
Overseas Buyers
There is growing interest from international buyers in acquiring U.S. based aesthetics practices,
which may include large hospital chains or investment companies. Global demand for cosmetic
procedures continues to surge and, for international buyers, purchasing an American practice
can represent an entry point into the lucrative U.S. healthcare market. While the checks will
cash, this is likely the most disruptive option on the board. Dealing with international
management and funding structures will stress your management team/office manager and
methods of communication, patient interaction, marketing and business management are all
unique to the culture in which they originate. This complicates an already complex environment
and can lead to poorly communicated expectations and missed goals. Understanding all of
those variables is paramount when considering an international buyer.
Selling your aesthetics practice is a big decision that can be complex and emotional. This is your
life’s work and ensuring that you receive maximum value, while setting yourself up for long-
term success is a critical component of the transaction. There are well over 150 active buyers
within the medical aesthetics space and sorting through them is no small task. Walking into a
transaction with a clear understanding of what your financial needs, quality of life goals and
vision for your future are, will help narrow down the options available in the market. Rarely do
we have clients who accept the highest value offer. Our goal is to identify the BEST fit available
and successfully negotiate a seller friendly transaction that will satisfy all of the above
considerations. You owe it to yourself to ensure you’re properly represented in the most
important process of your career.
Reach out to Job Snob partner, TUSK Practice Sales, and receive a no-obligation Practice
Valuation to learn what your business could be worth in today’s marketplace.
