The Impact of Consumer Health Trends on Medical Spa M&A

In recent years, medical spas have seen exponential growth. The increased number of consumers seeking non- and minimally invasive health and cosmetic procedures has significantly impacted the medical spa mergers and acquisitions landscape.

Here, we'll explore how these consumer health trends have already started influencing mergers and acquisitions strategies within the space.

The Trends

Proactive, Preventative Mindsets

From IV hydration and skin rejuvenation to hormone therapy and body contouring, there's a growing demand for services that offer a preventative approach to health and wellness. Medical spas perfectly align with this newfound proactive mindset.

Holistic Approaches

Taking a more integrative approach to health, many medical spas have expanded their offerings to include services like:

• Massage therapy
• Nutritional coaching
• Acupuncture
• Hair restoration

This is all to meet the new trend of providing a comprehensive wellness experience that encompasses physical, mental, and emotional well-being.

Non-Invasive Procedures

A trend that shows no sign of slowing is the demand for non-invasive cosmetic procedures, including dermal fillers, laser treatments, and Botox. These procedures apply to a broad demographic due to their minimal downtown, near-immediate results, and fewer risks than traditional surgical options.

Tailored Solutions

Medical spa clients now expect personalized solutions tailored to their wants and concerns. Many spas have adopted and leveraged advanced technologies, including genetic testing, to meet these expectations. The resulting customized treatment plans provide better results and increase patient satisfaction.

The Impact on Mergers & Acquisitions

Increased Interest & Valuation

Thanks to their growth potential and lucrative profit margins, investors and firms have become more interested in acquiring medical spas. Mergers and acquisition strategies are being adapted to include more of these attractive investment targets. With repeat customers and ongoing treatments, many established medical spas come with the promise of recurring revenue.

These trends have also inspired current medical spa operators to consider expanding their portfolios. By acquiring other established businesses, they can quickly scale their operations and broaden their service offerings. Such a move would attract a broader audience in more geographic regions, potentially making it a lucrative acquisition strategy.

On the exit planning side, consumer demand for medical spa services has increased these businesses’ valuation. For those ready for the next chapter in their lives, it's an excellent time tosell a medical spa business.

Enhanced Focus on Innovative Technologies

Now more than ever, those looking to merge with or acquire a medical spa are increasingly evaluating the advanced technologies the spa utilizes. Cutting-edge services, including:

• Telehealth visits
• Laser treatments
• Diagnostics assisted by AI

Improve the spa's efficiency while enhancing the quality of care—two key areas that make them more valuable and, thus, attractive to other business owners. When devising new merger and acquisition strategies within the medical spa sector, we expect to see more interest in businesses that have already integrated advanced technologies.

Compliance Considerations

The compliance environment for medical spas is complex. Different regions have varying requirements, and for every new service that's developed, a new set of regulations comes with it. These changes and varying requirements can be challenging to keep up with, making a merger or acquisition an attractive prospect.

By combining practices, compliance processes can be streamlined and protocols standardized. Both of these moves can help reduce the risk of regulatory issues while ensuring consistent, quality service across multiple locations.

Leverage These Trends Today

If you're currently in the medical spa industry or looking to diversify your portfolio, now is the time to make a merger or acquisition move. Capitalizing on these consumer health trends makes you more likely to secure a favorable outcome.

Connect with Randy Krivo, our Managing Director of Medical Practices, to learn more about how these trends can benefit you and your expansion or exit strategies.