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The Rise of M&A in the Healthcare Sector: Opportunities in Medical Spas and Beyond

True North Mergers & Acquisitions

April 7, 2024

The medical spa industry is booming. With a 10% year-over-year growth since 2017, the sector has surged to $9 billion. If consumer trends continue, we anticipate the industry reaching over $23 billion in value within the next two years.

While this highly fragmented industry attracts investors eager to turn small businesses into large-scale enterprises, it raises the question: What is driving this growth, and is it sustainable? We’ll tell you everything we know.

Consumer Behavior is Shifting

Consumer attitudes toward appearance are shifting with cultural attitudes. While frequent visits to medical spas may have once been viewed as vain, excessive, or unattainable for many, our society now places greater emphasis on self-care and wellness. The belief that how you look affects how you feel is no longer considered a niche attitude. If you have any doubts, take another look at the numbers above.

Limited Availability

The demand is there. Yet, the fragmented medical spa industry is struggling to keep pace. Why?

The obvious answer is that there are not enough service providers. Beyond that supply shortage is that the medical spa industry consists largely of mom-and-pop shops—small, privately owned businesses that lack the resources to streamline services. So, while privately owned clinics report increased interest and a significant boost in the bookings, they cannot effectively accommodate the growing demand.

Demographic Shifts

In the past, most medical spa clients were female. That’s changed. We’re seeing high demand for services for both men and women—particularly with millennial males. Surprisingly, the number of male botox procedures tripled between 2020 and 2023, and, on average, men now spend more on health and wellness every month than women. We expect this growth to continue in the next decade.

Social Media Influence

It’s no surprise that social media is helping to normalize self-care, particularly with Gen Z consumers. 44% of this demographic say they learned about cosmetic procedures from social media, and nearly 60% report researching such procedures online before consulting a doctor.

Long story short: there is a ready market; the industry must leverage the right tools to engage it.

Fragmented Market

The medical spa industry consists largely of small, privately owned businesses with a single location. Despite demand, these businesses struggle to scale because they:

  • Lack the necessary resources to market themselves, invest in new technology, hire more staff, or expand to multiple locations
  • Struggle with day-to-day inefficiencies, which hurt their ROI
  • Do not provide consistent service, which negatively impacts the customer experience

This presents a massive opportunity for investors or larger companies to consolidate the market, drive innovation, and scale.

Put Your Trust in an Advisor With Industry Expertise

At True North Mergers & Acquisitions, you get access to highly knowledgeable advisors with extensive industry experience, like Randy Krivo, our Managing Director of Medical Practices. Here’s what he brings to the table:

  • 35 years building, buying, and selling businesses
  • 100+ medical practice transitions
  • 100% medical spa industry closing ratio
  • $44M enterprise value sold in the past 12 months

Randy knows the medical spa industry from top to bottom. Connect with him today for a successful tomorrow.

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