Guide to Selling a Dermatology Practice in Atlanta, GA

Executive Summary

Selling your dermatology practice in Atlanta, GA is a significant decision. This guide offers insights into the current market, key considerations like valuation and buyer types, and the general sale process. Making informed choices now can greatly impact your outcome. Proper preparation before selling can significantly increase your final practice value.

Market Overview: The Atlanta Dermatology Landscape

The Atlanta, GA market for dermatology practices is currently quite active. You’re likely experiencing high patient demand, with many local practices seeing upwards of 30 to 50 patients daily. This strong demand makes Atlanta an attractive area for buyers. At the same time, the broader dermatology field is a hotbed for consolidation, with private equity groups and Management Services Organizations (MSOs) actively seeking to partner with or acquire successful practices like yours. This trend brings both opportunities and new dynamics to consider.

However, it’s not all smooth sailing. Many independent practices face rising operating costs and pressures from decreasing reimbursements. Understanding these dual forces of high demand and operational challenges is key to navigating the path to a successful sale. The window of opportunity for optimal valuations shifts with market conditions.

Key Considerations for Atlanta Dermatology Practice Sellers

When you’re thinking about selling your dermatology practice in Atlanta, several key factors come into play. Getting these right can make a big difference in your final outcome.

Understanding Your Practice’s True Worth

Determining the fair market value is more than just looking at your revenue. It involves a deep dive into your financials, particularly your adjusted EBITDA, but also considers your staff quality, reputation, service mix (medical vs. cosmetic), and specific location within Atlanta. A comprehensive valuation is the foundation of a successful practice transition strategy.

Knowing Your Buyers

Who are you selling to? It could be another dermatology group looking to expand (a strategic buyer), or a private equity firm or MSO (a financial buyer). These different buyer types have different goals. For instance, PE firms and MSOs are very active in consolidating dermatology practices and often prefer that sellers stay on board for a few years post-sale.

Planning Your Future Role

What do you want to do after the sale? Some owners want to retire completely, while others might want to continue practicing without the administrative headaches. Clarifying your motivations for selling helps identify the best type of buyer and deal structure for your personal and professional goals.

The Atlanta-Specific Context

Don’t forget the local picture. In Atlanta, factors like the demographics of your patient base, the visibility and accessibility of your practice location, and even nearby new housing or business developments can influence your practice’s appeal and growth potential in a buyer’s eyes.

Market Activity: Trends in Dermatology M&A

The market for dermatology practice sales has been active, and this is particularly true for sought-after specialties like yours. For several years, we’ve seen a strong trend of consolidation, with larger groups and private equity firms actively looking for practices to acquire. This is expected to continue.

Between 2021 and 2023, a significant portion of these deals 12 about 73% 12 were “add-on” acquisitions, where smaller practices are merged into larger existing platforms. More recently, in 2023, there was a noticeable uptick in what we call “growth type” private equity deals. This means investors are not just looking to bolt on practices, but also to invest in platforms for significant expansion. While the overall pace showed some signs of slowing in early 2024, this was largely attributed to fewer practices being available for sale, not a lack of buyer interest. For a well-positioned Atlanta dermatology practice, demand remains robust. Understanding your practice’s current market position is the first step toward a successful transition.

The Sale Process: What to Expect

Selling your practice isn’t a quick transaction. It’s a structured process that typically unfolds over several months. While each sale is unique, most follow a similar path. Having your financial and legal records well-organized from the start is very important here.

Here’s a simplified look at the typical stages:

The due diligence phase is often where deals can face unexpected hurdles if you’re not thoroughly prepared. This is a key area where experienced guidance can help ensure a smoother journey. The due diligence process is where many practice sales encounter unexpected challenges.

Understanding Your Practice’s Value

One of the biggest questions you’ll have is: “What is my Atlanta dermatology practice worth?” The answer is more complex than a simple formula. Buyers, especially sophisticated ones like private equity groups, look closely at your practice’s financial health, primarily its Adjusted EBITDA. This isn’t just your net income. Adjusted EBITDA normalizes for owner-specific expenses or one-time costs to show the true underlying profitability. For thriving dermatology practices, healthy EBITDA margins often range from 20% to 35%.

This Adjusted EBITDA figure is then typically multiplied by a certain number (a “multiple”) to arrive at an initial valuation. This multiple isn’t fixed. It can vary significantly based on your practice’s size, the split between medical and cosmetic services, your reliance on owner-physicians versus associates, and your demonstrated growth trajectory. For instance, practices with over $1 million in EBITDA often see multiples in the 5.5x to 7.5x range, and sometimes higher for larger, strategic platforms. Getting this valuation right is critical. Curious about what your practice might be worth in today’s market?

Planning for Life After the Sale

The journey doesn’t end when the sale documents are signed. Thinking ahead about the post-sale period is important for your peace of mind and the continued success of the practice you’ve built.

Your Continued Role (Or Not)

Many buyers, particularly MSOs and private equity groups, will want you to continue working in the practice for a defined period, often three to five years. It’s important to be clear about your own desires regarding post-sale involvement. Do you want to keep practicing? Reduce your hours? Transition out completely? This needs to be discussed and negotiated upfront.

Ensuring Smooth Transitions

How and when will you tell your staff and patients about the sale? A well-thought-out communication plan can minimize anxiety and ensure continuity of care. This also involves practicalities like managing patient record transfers and addressing staff questions about their future with the new ownership. Your legacy and staff deserve protection during the transition to new ownership.

Understanding Deal Structures

Sometimes, not all the money changes hands at closing. You might encounter “earnouts,” where part of the sale price is contingent on the practice hitting certain performance targets post-sale. Or, you might be offered “rollover equity,” where you reinvest a portion of your proceeds into the new, larger entity. These structures can offer upside but also come with their own set of considerations that require careful evaluation.

Selling your Atlanta dermatology practice is a major step. With careful preparation and the right guidance, you can navigate the process confidently and achieve your personal and financial goals. Every practice sale has unique considerations that require personalized guidance.