The market for selling a dermatology practice in Fort Lauderdale is experiencing a period of intense buyer demand. Favorable demographics and significant private equity interest have created a window of opportunity for owners considering an exit. Understanding how to navigate this landscape is key to maximizing your practice’s value and achieving your personal and financial goals. A well-planned approach can make all the difference.
Executive Summary
For dermatology practice owners in Fort Lauderdale, current market conditions are highly favorable for a sale. A combination of strong private equity interest, a growing patient base, and a looming physician shortage has created a sellers market. This guide provides insights into the key factors driving value, the steps in the sale process, and how you can strategically position your practice for a premium valuation and a smooth transition to its next chapter.
Market Overview
The Fort Lauderdale market is currently one of the most attractive locations in the country to sell a dermatology practice. This is not a matter of luck. It’s the result of several powerful forces coming together at the same time. This strong demand is driven by a unique convergence of factors that directly benefit practice owners.
Three key trends are fueling this environment:
- Powerful Demographics: Floridas large and growing population of residents over 65 creates a consistent demand for medical dermatology. At the same time, Fort Lauderdale’s vibrant, younger demographic fuels the high-margin cosmetic side of the practice.
- High Private Equity Interest: The South Florida region is a well-known hub for private equity (PE) activity. Sophisticated buyers are actively seeking to acquire and partner with established dermatology practices in this area.
- Unmet Patient Demand: With long wait times for new appointments across the region, there is clear evidence that the demand for dermatology services outpaces the current supply.
Key Considerations
While the market is strong, a buyer’s interest truly sharpens when they look inside your practice. They are looking for more than just a profitable business. They are looking for a stable and scalable operation. Your practice’s unique mix of services is a major factor. Buyers are especially attracted to practices with diverse revenue streams, such as a healthy balance between medical dermatology and higher-margin cosmetic services or ancillary offerings like a MedSpa. Equally important is the strength of your team and your reputation in the community. A stable, qualified staff and consistently positive online reviews are not just nice to have. They are tangible assets that signal a healthy, well-run practice and reduce perceived risk for a buyer.
Market Activity
The favorable conditions in Fort Lauderdale are not just theoretical. They are reflected in real-world transaction trends that signal a prime selling environment. The market is active, and buyers are motivated.
Strong Buyer Appetite
Nationally, the number of private equity deals in dermatology is climbing, from 54 in 2021 to 77 in 2023. This shows a growing appetite from well-capitalized buyers who are actively looking for quality practices to acquire. This level of interest creates a competitive environment. When multiple buyers are interested, sellers are in a much stronger position to negotiate favorable terms and valuation.
The Succession Opportunity
A critical factor fueling this activity is the “great retirement” wave in medicine. With nearly half of all practicing dermatologists over the age of 55, buyers see a clear opportunity. They can acquire a successful practice and provide a succession plan, ensuring continuity of care for the community. For a selling physician, this means you are not just selling a business. You are providing a solution to a growing market need.
The Sale Process
Selling a practice is a structured journey with distinct phases. Many owners tell us that the process can feel overwhelming. However, knowing the roadmap ahead of time can make it far more manageable. While every deal is unique, most transactions follow a similar path from preparation to closing. A smooth process is built on transparency and preparation, especially for the due diligence phase where buyers will scrutinize your financial and operational records.
Here is a typical overview of the sale process:
| Stage | What It Involves | Where An Advisor Adds Value |
|---|---|---|
| 1. Preparation | Gathering financial records, optimizing operations, and establishing a valuation. | Normalizing financials to maximize EBITDA and creating a compelling narrative for buyers. |
| 2. Buyer Engagement | Confidentially marketing the practice to a curated list of qualified buyers. | Running a competitive process to generate multiple offers and create negotiating leverage. |
| 3. Letter of Intent (LOI) | Negotiating the high-level terms of the deal, including price and structure, with the chosen buyer. | Structuring the deal to protect your interests and optimize post-tax proceeds. |
| 4. Due Diligence | The buyer conducts a deep dive into your financials, operations, and legal compliance. | Managing the data room and anticipating buyer questions to prevent surprises and keep the deal on track. |
| 5. Closing | Finalizing legal documents, transferring funds, and officially transitioning ownership. | Coordinating with legal and accounting teams to ensure a smooth and timely close. |
Valuation
Understanding what your practice is worth is the foundation of a successful sale. It is not based on a simple rule of thumb. Sophisticated buyers use a specific methodology to determine value, and knowing how they think is a major advantage.
The Key Metric: Adjusted EBITDA
The most important number in any practice sale is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is not the same as the net income on your tax return. We calculate it by taking your profit and adding back owner-specific expenses like an above-market salary, personal vehicle leases, or other discretionary costs. This gives a true picture of the practice’s profitability. This Adjusted EBITDA figure is then multiplied by a number (a multiple) to determine the enterprise value. Right now, dermatology practices with over $1 million in Adjusted EBITDA can see multiples in the 5.5x to 7.5x range.
Beyond the Numbers
The final multiple is not set in stone. It is influenced by your story. Buyers will pay more for practices that have a strong growth profile, a diverse mix of medical and cosmetic services, and are not overly reliant on a single provider. Presenting this story effectively is just as important as the numbers themselves. Many practice owners are surprised to learn their practice is worth more than they thought once their financials are properly normalized and their story is told correctly.
Post-Sale Considerations
The transaction closing is not the end of the journey. Planning for what comes next is critical for ensuring your legacy, protecting your staff, and securing your financial future. A successful transition is about more than just the purchase price. It is about the structure of the deal and the plan for the future.
We find that focusing on three key areas in advance leads to the best outcomes:
- Your Team and Legacy: A key concern for every owner is what happens to their dedicated staff and patients. The right buyer will see them as assets to be retained. We help structure deals that include retention plans for key staff and ensure a smooth, compliant transition of care for patients, protecting the legacy you have built.
- Your Future Role: You have options. Many sellers are not looking to simply retire. We specialize in finding partners who offer flexible arrangements, from a clean exit to staying on as a clinical leader. Some deals even include rollover equity, where you retain ownership in the larger new company, giving you a chance for a “second bite at the apple” when that company is sold again.
- Your Financial Outcome: The deal structure has major implications for your after-tax proceeds. Thinking through the tax strategy early in the process can significantly impact the amount you ultimately take home.
Frequently Asked Questions
What factors make Fort Lauderdale a strong market for selling a dermatology practice?
Fort Lauderdale’s market is favorable due to powerful demographics, including a large aging population demanding medical dermatology and a vibrant younger population driving cosmetic services. Additionally, there’s high private equity interest and unmet patient demand creating a seller’s market.
How can I maximize the value of my dermatology practice before selling?
Maximize value by optimizing operations, normalizing financials to maximize Adjusted EBITDA, diversifying services (medical, cosmetic, and ancillary like MedSpas), maintaining a stable and qualified staff, and ensuring strong community reputation with positive reviews.
What is the typical sale process for a dermatology practice in Fort Lauderdale?
The sale process includes: 1) Preparation with financial and operational optimization, 2) Buyer Engagement marketing to curated buyers, 3) Negotiation of Letter of Intent, 4) Due Diligence with buyer scrutiny, and 5) Closing with legal and financial finalization.
How is the valuation of a dermatology practice determined?
Valuation is primarily based on Adjusted EBITDA multiplied by a market multiple (currently 5.5x to 7.5x for practices with over $1 million in Adjusted EBITDA). Buyers also consider the practice’s growth potential, service mix, and operational stability.
What should I consider for post-sale planning after selling my dermatology practice?
Post-sale considerations include ensuring the retention and smooth transition of your team and patients, deciding on your future role (full exit or clinical leadership), and planning your deal’s tax strategy to optimize your after-tax proceeds.