Dermatology Private Equity – Market Update

As we move through the midpoint of 2025, investor interest in dermatology remains extremely strong, consistent with the specialty’s history of robust M&A activity. Deal flow, however, has shifted meaningfully since the frothy, volume-driven environment of 2021–2022. With rising interest rates and a more selective investor mindset, M&A activity beginning in mid-2023 has been characterized less by sheer volume and more by higher-quality transactions. The chart below, sourced from PitchBook, highlights this transition and underscores how dermatology remains one of the most resilient and active physician specialties despite evolving market conditions.

Following this broader market shift, dermatology has continued to experience meaningful consolidation. The last major wave of activity came in 2022 with significant platform combinations, including QualDerm Partners merging with Pinnacle Dermatology and Platinum Dermatology combining with West Dermatology. Around this same period, several “second and third bite” transactions reshaped the landscape, such as CI Capital’s sale of Epiphany Dermatology to Leonard Green & Partners, DOCS Dermatology’s sale from Sheridan Capital Partners to SkyKnight Capital, and Forefront Dermatology’s third bite from OMERS to Partners Group.

More recently, consolidation has been led by Schweiger Dermatology, with its acquisition of United Skin Specialists in 2024 and its landmark purchase of California Skin Institute in 2025. These headline deals were complemented by substantial add-on activity from groups positioning themselves for a successful “next bite” in the near term.

Dermatology’s growth has been further fueled by the continued cosmetic interest, driving acquisitions of med spas and plastic surgery clinics as groups pursue a broader “skin health” strategy. This convergence of medical and cosmetic dermatology continues to attract strong investor attention, reinforcing the specialty’s position as one of the most active within physician services M&A. At the same time, buyers are narrowing their focus, yet when a high-quality asset comes to market, competition and valuations remain strong. Many private equity backed dermatology groups are also approaching their second or third recapitalizations, adding fresh capital to continue with deal activity. However, the regulatory environment at the state level continues to create hurdles for transactions. These challenges are only expected to intensify over the years to come.

Current PE Backed Landscape

Intial Platform investments only, does not reflect add-on locations

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Recent Dermatology Transactions

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About Our Firm

Physician Growth Partners (PGP) is a transaction advisory firm working exclusively with independent physician groups in transactions with private equity.

Differentiated Healthcare Transaction Advisors:

• Senior partner involvement at every stage of the process
• Extensive physician practice transaction experience
• Unmatched relationships with all key private equity and strategic buyers interested in Eye Care
• Educational approach focusing on both partnership and cultural fit, while simultaneously achieving a market clearing valuation

Recent Relevant Dermatology Transaction Expertise