Viper Equity Partners, a sell-side investment banking firm and industry leader in dental, dermatology, plastic surgery and ophthalmology transactions predicted in 2017 that plastic surgery would be the next big private equity target.
Having since closed $200-million in transactions, Viper considers this to be only the beginning of a 10-year run.
“The first couple years were tough trying to gain interest from our private equity partners,” Viper founder David C. Branch said. “We knew it would be huge once it started but, in those days, it was deal-by-deal.”
Fast forward to 2022, and the market is “extremely busy.” Private equity firms are flooding the market with new platforms focused on med spas, aesthetics, and plastic surgery offices of all specialties.
The industry just makes sense. From the revenue side there is insurance, fee-for-service, and an enormous flow of recurring revenue streams. Procedures range from premium cost surgeries to moderately-priced noninvasive options available through nurses and physician assistants. The reality of people living longer and the desire to look better coupled with a surging economy makes it a must-have business model.
Viper is looking for multi-location cosmetic and reconstructive plastic surgery offices nationwide with revenues above $10-million.
Viper currently has a large inventory of plastic surgery practices for sale and roll ups available for acquisition. “We have targeted individual deals with EBITDAS in the $3-5-million-dollar range, and roll ups with over $10-million,” says Samir Qureshi, Viper’s Aesthetic Division President.
There have also been very successful mergers between dermatology and plastic surgery groups, bringing cross-referral revenue back in house, combined with the strong insurance revenue that dermatology offices provide. The two business models align perfectly.