Dermatology & Private Equity Alignment: Charlotte Dermatology and DOCS Dermatology

Charlotte Dermatology logo, care since 1939.

Introduction

Charlotte Dermatology (“Charlotte Derm”) is a distinguished dermatology practice known for its clinical excellence and strong brand equity in the Carolinas. Established in 1939, Charlotte Derm is one of the longest-standing medical practices in the Greater Charlotte Market, led by top physician leaders with a reputation for delivering high-quality clinical outcomes. With a presence in an attractive and growing market, Charlotte Derm sought a strategic partner to support its continued expansion and operational efficiencies.

Client Background

Charlotte Dermatology had been approached multiple times by strategic private equity buyers and had engaged in preliminary transaction discussions without a healthcare investment banker. After receiving an offer and signing a Letter of Intent (LOI), they recognized the need for seasoned advisory expertise to navigate the transaction’s complexities and secure the best possible outcome. The shareholders of Charlotte Derm were referred to Physician Growth Partners (PGP) by a peer who had successfully completed a transaction with Physician Growth Partners as their advisor. In seeking an advisor, the shareholders wanted a group who could help them secure the best possible economic outcome while ensuring cultural alignment with the right healthcare private equity partner.

When evaluating a strategic private equity partner, Charlotte Dermatology’s shareholders prioritized continued growth and expansion while maintaining their reputation for clinical excellence. Managing eight locations across two states created significant administrative burdens, and they sought relief from these operational challenges. Additionally, they wanted a healthcare private equity partner who could provide strong managerial support and drive operational efficiencies, ensuring long-term success and sustainability for the practice.

Transaction Overview

Upon engagement with Physician Growth Partners, Charlotte Dermatology ran a targeted marketing process with strategic private equity backed platforms. Ultimately, they partnered with DOCS Dermatology Group, a leading dermatology-focused platform.

Physician Growth Partners played a crucial role in structuring and executing a competitive process that enabled Charlotte Dermatology to assess its strategic alternatives and select the most suitable partner. The process included:

  • Conducting a thorough valuation analysis to ensure shareholders received maximum economic value.
  • Identifying and engaging potential private equity partners that aligned with Charlotte Derm’s growth objectives and cultural priorities.
  • Negotiating deal terms that preserved the clinical autonomy and legacy of Charlotte Derm while achieving financial and operational efficiencies.

Charlotte Dermatology’s partnership with DOCS Dermatology Group was officially announced in a press release, underscoring the success of the transaction and the alignment between the two organizations.

Outcome and Impact

Charlotte Dermatology’s partnership with DOCS Dermatology allowed its shareholders to reward themselves for the business they had built throughout their career, while positioning it to begin its next chapter. The founding physicians will benefit from the density DOCS has built in the North Carolina market through enhanced reimbursement and a significant decrease in their day to day administrative burden, while remaining in complete control of all things clinical.

Conclusion

For physicians looking for further assistance in the ever challenging market of independent practice, a strategic partnership can help grow the practice by improving operations, aggregating scale, and sharing resources, while allowing the physician shareholders to focus on maintaining and improving patient care. This can translate to further growth and success for the practice, their patients and the community.

If you’re a founder or shareholder of an independent physician practice wondering what the value of your practice is or would like some help to confirm/deny if a strategic partnership is an avenue worth exploring, please fill out the form below and one of our healthcare M&A advisors will be in touch.