Private Equity Investment in Plastic Surgery Practices
Overview:
Healthcare private equity consolidation has long been a driving force in reshaping the healthcare landscape, fueled by market inefficiencies and ancillary opportunities. Since the late 1990s, healthcare Private Equity investors have sought to partner with clinically strong providers, leading to the creation of regional and national platforms. Plastic surgery practices have recently garnered significant interest from private equity investors, spurred by market dynamics and the potential for growth in both existing and emerging markets.
Market Trends:
While private equity has indirectly been involved in plastic surgery through the dermatology space since 2011, there has been a notable surge of direct interest in recent years. The formation of platforms like Prime Plastic Surgery and Ascend Plastic Surgery Partners underscores this growing trend, with 10 active, PE-backed plastic surgery platforms emerging by 2023. Despite this rapid consolidation, the market remains highly fragmented, indicating significant opportunities for further consolidation in the future.
Investment Drivers:
The plastic surgery market presents attractive investment prospects due to factors such as market fragmentation, realizable economies of scale, and ancillary revenue opportunities. Unlike other verticals, plastic surgery practices benefit from minimal reliance on referral relationships and health system interactions, making them particularly appealing to private equity investors.
Market Activity:
Advanced MedAesthetic Partners, Prime Plastic Surgery & Med Spa, and Alpha Aesthetics Partners have emerged as key consolidators in the plastic surgery private equity space. Additionally, six new platforms have been established in recent years, reflecting heightened investor interest and activity in the market. Continued sponsor-backed capital is anticipated to fuel the establishment of new platforms and bolt-on investments in the coming years.
Olympic M&A specializes in guiding plastic surgery practices through the private equity process, ensuring successful outcomes for our clients. Our comprehensive approach includes:
1. Financial Modeling: Developing customized financial models to optimize cash flow and future credit, showcasing ongoing growth initiatives.
2. Buyer Mix Strategy: Identifying the right mix of potential buyers, including strategic acquirers and private equity groups, and implementing targeted strategies to engage them effectively.
3. Buyer Marketing and Negotiation: Managing buyer engagement, from marketing and bid solicitation to negotiation, to secure favorable terms for our clients.
4. Client Positioning: Positioning our clients to attract relevant potential buyers with compelling offers that align with cultural fit, strategy, and alignment.
5. Transaction Management: Overseeing the entire transaction process, maximizing leverage with potential buyers to achieve optimal outcomes.
6. Deal Negotiation: Leveraging our experience within the plastic surgery sector, negotiating key economic and structural deal terms to ensure favorable results.
7. Due Diligence Facilitation: Facilitating due diligence processes seamlessly, ensuring a smooth transition to closing without disrupting day-to-day operations.
8. Maximizing Financial Results: Maximizing financial results for our clients while preserving their clinical autonomy, ensuring a successful and mutually beneficial transaction.
By leveraging our expertise and industry insights, we empower plastic surgery practices to navigate the complexities of private equity investment successfully.
