Aesthetics: The Medical Spa Show Highlights Deal-Making Momentum

Our senior professionals recently attended AmSpa’s The Medical Spa Show, an event connecting medical aesthetics companies and professionals. There, they saw continued investor interest in the space and its variety of value-creation opportunities. 

In this article, they share the key factors driving aesthetics growth and what investors should seek in leading companies. 

Repeatable, High-Ticket Services

Aesthetics is a large and growing multibillion-dollar market characterized by several well-known themes that continue to draw investor attention, such as its highly recurring, high-margin services. 

Meanwhile, many concepts are broadening their service offering to address evolving consumer preferences. “While core aesthetics services, such as injectables like Botox and fillers and energy-based device treatments, remain popular, many businesses are expanding into various concierge health and wellness offerings,” says Corey Benjamin, a managing director in the Consumer Group. An example is providing hormone replacement therapies as well as GLP-1 medications, including semaglutides like Wegovy and Ozempic, which meet strong, recurrent, and growing consumer demand for weight loss drugs. Supplying these drugs complements other aesthetics offerings and can enhance customer acquisition and retention, while further driving strong lifetime values. 

In addition to these opportunities to meet more customer needs, the aesthetics sector features significant fragmentation and has seen an uptick in M&A since 2019. “While we have seen substantially more platform creation and consolidation, the aesthetics market remains highly fragmented, including a mix of independent and small, newly created sponsor-backed platforms,” continues Benjamin. “Investors have the potential to drive growth through a combination of M&A and de novo strategies, while bringing professionalization and scale to the equation.” 

Multiple Avenues to Grow

Across aesthetics, there are many effective ways to succeed and build scale. For example, hybrid concepts take advantage of both the highly recurring, lower-ticket aspect of medspas and the higher-ticket nature of plastic surgery, with the added benefit of cross-sell potential between both areas.  

“Aesthetics offers plenty of white space for long-term expansion, and investors are eager to deploy capital in the sector,” says Benjamin. “The most sought-after companies typically have consistent store performance, a proven ability to recruit and retain providers, strong clinical quality and physician culture, and a clear roadmap to grow their geographic footprint and density.” 

To further discuss the aesthetics sector’s M&A potential, please contact our senior professionals.