Private Equity Demand Stays Resilient in Dermatology M&A

The dermatology market is currently defined by a shift toward add-on acquisitions. After the wave of new platform creation that peaked between 2021 and 2022, buyers are now prioritizing the integration of established, diversified practices. Clinics offering a mix of medical, surgical, and cosmetic services with at least $500,000 in EBITDA are attracting the most intense competition. Ryan Mingus, Managing Director and Partner at TUSK, notes that this scarcity of high-quality, operational practices provides current owners with significant leverage during negotiations.

A looming recapitalization cycle is expected to accelerate this activity through the end of the year. At least 25 private equity-backed dermatology platforms have been held for five or more years, forcing owners to seek exit or refinancing events. This influx of fresh capital is likely to bring more bidders to the table, even as high interest rates keep buyers cautious regarding debt. However, geography is emerging as a critical risk factor. New regulatory hurdles, such as Oregon's SB 951 and California's SB 351, are complicating the landscape for corporate practice ownership. With similar legislation pending in nine other states, investors are increasingly avoiding regions with restrictive oversight, potentially narrowing the exit options for owners in those specific jurisdictions.