Overview
Driven by regulatory efforts, market forces, and major structural changes, growth and consolidation has dominated U.S. health care for more than a decade.
From hospital systems and insurance providers to physician practices ranging from dermatology to dentistry, all corners of the health care market are experiencing aggregation, with more and more large superregional and national platforms being established.
Private equity investment in the dermatology sector began in 2011 and has accelerated in the decade that would follow. As of March 2025, there are 35+ active PE-backed dermatology platforms in the U.S.
Dermatology practices share many characteristics with other physician specialties that have experienced successful consolidation waves. For example, there is significant fragmentation (although that is starting to shift), coupled with significant imbalances between provider supply and patient demand.
In the second half of 2021, private equity groups made more than 15 investments in various dermatology and aesthetic practices around the U.S. Private equity buyers are eager to acquire the consistent cash flow and growth potential that specialty practices like dermatology can provide.
When it comes to exploring a practice sale, it is imperative practice owners engage a professional advisory team, which typically includes a healthcare focused investment banker and a legal advisor, who act as an extension of the practice’s shareholders and leadership team. Our team at PGP has successfully guided several dermatology practices through the private equity process. There are several steps that we take to ensure successful outcomes for our clients, including but not limited to:
- Develop the appropriate financial modeling to position maximized cash flow and “credit” for ongoing initiatives that are driving growth
- Determine the right mix of potential buyers (including both strategic acquirers and private equity groups) and implement a strategy to reach them
- Managing buyer marketing, bid solicitation, and negotiation
- Position the client to meet relevant potential buyers with strong offers that address cultural fit, strategy, and alignment
- Manage the transaction process to maximize leverage with potential buyers
- Negotiate key economic and structural deal terms, leveraging PGP experience within the dermatology specialty
- Facilitate all due-diligence pre-closing to ensure a seamless process that does not take away from the day-to-day business while ensuring the highest probability for a successful close
- Maximize financial results for shareholders while ensuring they maintain clinical autonomy
