TUSK Practice Sales unpacks the valuation landscape, buyer dynamics, and strategic window for dermatology practice owners.

CHARLOTTE, N.C., Aug. 28, 2025 /PRNewswire/ -- For dermatology practice owners considering a sale, the current moment represents one of the most favorable environments the market has seen. High buyer demand, compressed competition, and access to institutional capital are converging to produce what many are calling a "golden age" for dermatology M&A.

TUSK Practice Sales, the leading dermatology practice broker specializing in sell-side advisory for physician-owned businesses, breaks down the trends, timelines, and trade-offs that today's dermatology owners need to understand before entering the market.

"We're seeing dermatology valuations that rival those in more mature sectors like dental," says Kevin Cumbus, Founder and President of TUSK Practice Sales. "What makes this moment unique is that we're entering the second wave in the dermatology consolidation cycle, where more private equity investments come to play. That means more competition, more aggressive bidding, and more favorable deal structures for sellers who bring the right assets to market."

From Fragmented to Financialized: The Evolution of Dermatology M&A

Dermatology may be newer to the consolidation cycle than other healthcare verticals, but the playbook is well-established. Over the past two decades, private equity and MSO buyers have transformed the ownership landscape across specialties like dental, physical therapy, ophthalmology, and veterinary medicine. Now, dermatology is undergoing a similar shift and creating significant opportunities for those preparing for a dermatology practice sale.

As platforms form and scale, early sellers often find themselves in a strong position when their partner recapitalizes (sells to a new investor). These "second bites of the apple" can generate substantial additional upside, but only if the seller negotiated rollover equity and aligned properly with the right platform at the outset.

"We've been able to negotiate smart equity positions for our clients that balance the opportunity for significant returns with downside protections," says Ryan Mingus, Managing Director and Partner at TUSK. "But we've also seen sellers walk away with nothing post-recap because the initial terms weren't built for long-term alignment, or they didn't do their due diligence on the health of the business they were partnering with. That's why deal structure and partnering with a trusted dermatology practice broker, not just top-line valuation, is so critical."

Who's Buying Dermatology Practices and Why It Matters

The dermatology M&A market in 2025 is being driven by two dominant buyer profiles—each with different motivations, structures, and implications for practice owners:

1. Private Equity Groups Seeking Initial Platforms
These are investor groups actively looking to acquire a well-run dermatology practice or group of practices to serve as their foundational platform, the anchor business upon which a broader MSO is built. Platform sales often command the highest valuations and most favorable structures, as the initial acquisition sets the tone for the entire investment thesis.

"Platform deals are the crown jewel of healthcare M&A," says Ryan Mingus, Managing Director and Partner at TUSK Practice Sales. "For dermatology practice owners with the right size, infrastructure, and growth potential, the opportunity to lead a new platform can be career-defining—not just financially, but professionally."

2. PE-Backed MSOs in Expansion Mode
Once a platform is established, the sponsor typically builds scale through add-on acquisitions, integrating new practices into a unified operational model. These MSOs often move quickly, are well-capitalized, and offer competitive packages to doctors who align with their clinical vision and cultural goals. For sellers, this can be a fast path to liquidity while retaining clinical autonomy, especially if the MSO is on track for a near-term recapitalization.

3. Doctor-to-Doctor Transactions Still Have Their Place
While the institutional capital players dominate headlines, doctor-to-doctor sales remain active, particularly among smaller practices doing under $2M in revenue. These transactions may involve fewer complexities and can be a great fit for owners looking for a clean, quiet transition without the demands of long-term employment or scaled growth. However, they typically lack the competitive tension and upside potential of private equity deals.

"The most important thing is understanding which buyer pool your practice fits into," adds Kevin Cumbus. "Not every practice qualifies for a platform or partnership model, but every owner deserves to know where they stand and how to position for the best outcome."

Key Trends in 2025 Dermatology M&A

Valuations Remain at Historic Highs

Top-performing practices are routinely selling at attractive multiples of EBITDA, anywhere from 5-10X, with cash-at-close, retained equity, and favorable employment terms depending on the practice attributes. Practices with multiple providers, cosmetic revenue, and clean financials are drawing the strongest offers.

Competitive Tension Creates Leverage for Sellers

With fewer scaled platforms compared to other healthcare verticals, dermatology deals often involve multiple formal offers, giving sellers the power to negotiate not just price, but structure, timeline, and cultural fit. This process is typically achieved with an experienced dermatology broker who understands the key players in the space and how they align with your goals.

Sellers Are Younger and More Strategic

An increasing number of practice owners in their 40s and 50s are pursuing deals to reduce operational burdens, accelerate growth, or partially cash out early, while continuing to lead and expand under a larger umbrella.

Second Bites of the Apple Offer Major Upside—If Structured Right

Sellers who retain equity during their first transaction may receive a second, significant payday when the platform recapitalizes. But that equity must be structured and protected from dilution to truly pay off.

What Could Disrupt This Window?

While the current market remains favorable, several macroeconomic and policy-driven variables could reshape M&A dynamics in the months ahead:

• Interest Rate Volatility: As borrowing costs fluctuate, buyer leverage and deal aggressiveness may taper.
  
  
• Capital Gains Tax Changes: The potential sunset of the 2017 Tax Cuts and Jobs Act in 2026 could increase tax exposure on sale proceeds, reducing net outcomes.
  
  
• Political Shifts: Healthcare policy changes and increased scrutiny on private equity in medicine may lead to new regulatory challenges for buyers.
  
  
• Economic Softening: If macro indicators trend toward recession, buyer sentiment and access to capital could tighten.

"There's real value in exploring your options while the landscape is competitive and capital is still flowing," says Kevin Cumbus. "It's not about selling tomorrow—it's about understanding your position, protecting your upside, and planning with clarity."

About TUSK Practice Sales

TUSK Practice Sales ("TUSK") provides M&A Advisory services in the healthcare industry. TUSK has completed over $1B of transactions across all specialties. With an in-depth understanding of the marketplace and access to 100's of buyers nationwide, we help our clients confidently pursue M&A transactions that maximize their long-term value. With our significant collective experience of over 50+ years of practice transactions, we offer our clients solutions that help them achieve their strategic and financial objectives. For more information, visit www.TuskPracticeSales.com

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SOURCE TUSK Practice Sales