M&A advisory firm TUSK Practice Sales outlines key buyer types and deal structures, emphasizing the need for surgeons to mitigate risk to maximize valuation.
The market for plastic surgery practice sales continues to be active, with management services organizations (MSOs) and private equity (PE) groups offering premium valuations for well-positioned practices. TUSK Practice Sales, a healthcare M&A advisory firm, provides insights on current exit options, deal structures, and market evolution heading into 2026.
According to the firm, while unsolicited offers from institutional buyers may be appealing, they often do not reflect the practice’s true market value. The firm notes that a competitive, marketed sales process can increase initial offers by 40% to 100%.
Navigating the Three Primary Buyer Paths
The firm identifies three main exit strategies for practice owners, each with distinct criteria:
- MSO Partnership Sale: This option is suited for established practices with over $2 million in revenue. MSOs provide centralized administrative services and operational support, allowing surgeons to maintain clinical autonomy. However, buyers in this category view solo-doctor practices as high-risk due to dependency on a single surgeon, making continuity post-sale a major concern.
- Private Equity Platform Deal: PE groups target larger, multi-location practices with strong brand recognition and potential for scalability. These deals often yield the highest EBITDA multiples and present significant equity opportunities. Similar to MSOs, PE buyers are sensitive to “key man risk” and typically require an associate or partner surgeon to be in place.
- Doctor-to-Doctor Sale: This remains a viable path for smaller practices, particularly those with under $2 million in revenue. A younger surgeon acquires the business to take over an established brand and patient base. Valuations are typically lower than those in MSO or PE deals but offer a more straightforward transition.
Factors Beyond the Final Valuation
While valuation is a primary focus, the firm stresses that deal structure and terms are equally important. Key considerations for selling surgeons include the timing of proceeds, as most deals involve a mix of upfront cash, rollover equity, and performance-based earn-outs.
Surgeons should also evaluate post-close employment agreements, which typically span three to five years and define compensation, responsibilities, and non-compete clauses. Other critical factors include cultural alignment with the buyer’s clinical philosophy and a careful assessment of the potential upside from rollover equity, which depends on the buyer’s management and growth strategy.
Positioning for Future Market Activity
The firm also suggests that while current demand is strong, greater buyer activity is anticipated in 2026 as more capital enters the medical aesthetics space. This positions 2025 as a strategic year for practice owners to prepare for a sale by bringing on associates to address “key man risk,” refining operations, and benchmarking their valuation.
“The practices that achieve premium outcomes are the ones that maximize cash flow (EBITDA) and minimize risk for the buyer,” says Kevin Cumbus, president of TUSK Practice Sales, in a release. “It’s not just about EBITDA. It’s about whether the practice can thrive after the close and the founder steps back. Owners who recognize this and prepare now will be in the best position to capitalize, whether in late 2025 or in the wave of 2026 activity. Building redundancy in your providers is critical in this deal environment.”
