Selling your Los Angeles plastic surgery practice is a significant financial and personal decision. In a market this competitive and lucrative, a well-planned exit can secure your financial future and legacy. This guide provides a clear overview of the current market, key valuation drivers, and the steps involved in a successful sale. We will walk you through the process, helping you understand how to prepare for your transition.
Market Overview
The Los Angeles plastic surgery market is one of the most robust and dynamic in the world. National industry revenues hit $24.3 billion in 2023, and LA is at the heart of that growth. For practice owners, this creates a favorable environment for a potential sale. Sophisticated buyers are actively seeking established practices, driven by several key local trends.
Three market drivers you should know:
1. Expanding Service Demand: The appetite for aesthetic procedures is growing. Buyers look for practices with a healthy mix of popular surgical procedures like neck lifts and breast augmentations, alongside high-margin, non-surgical treatments like injectables.
2. The Rise of Combination Procedures: Patients are increasingly seeking multiple treatments at once. Practices that can demonstrate a history of performing and billing for these complex, high-value cases are very attractive.
3. A Widening Patient Base: The market is no longer limited to a single demographic. The increasing number of men seeking treatments represents a significant growth channel that strategic buyers want to capture.
Key Considerations
Beyond market trends, the specific characteristics of your practice will heavily influence its attractiveness to buyers. Your online reputation and branding, for example, are not just for attracting patients. They are assets that demonstrate market penetration and patient loyalty to a potential acquirer. An on-site, certified Ambulatory Surgical Center (ASC) can also substantially increase your practice’s value and strategic appeal.
Most importantly, the sale process itself requires careful management. Maintaining strict confidentiality is critical to protect your staff, patient relationships, and leverage with buyers. Ensuring all legal and financial documentation is prepared for scrutiny in advance prevents surprises and delays. These are foundational elements that sophisticated buyers expect to see in a well-run practice.
Market Activity
The M&A market for plastic surgery practices in Los Angeles is highly active, but much of it happens behind closed doors. Transaction details are confidential, which is why working with an advisor who has a pulse on the market is so important.
The Influence of Private Equity
A significant portion of today’s buyers are private equity groups or their established portfolio companies. These groups are looking to build regional or national platforms. They are sophisticated, well-funded, and move quickly. They seek practices with strong operations, multiple revenue streams (surgical, non-surgical, skincare), and potential for growth that they can help accelerate. For the right practice, this creates a highly competitive bidding environment.
What Buyers are Paying For
Buyers do not pay for potential. They pay for proven, predictable performance. The most common objection we hear from owners is, “I’m not ready to sell yet.” The best time to start preparing is actually 2-3 years before your target exit. This gives you time to optimize your operations and financials to demonstrate a clear track record of growth, which is exactly what commands premium valuation multiples.
Sale Process
A well-structured sale is a deliberate process, not a rushed event. From the initial decision to the final closing, a typical transaction takes four to six months. Trying to accelerate this timeline often works against you, signaling to buyers that you are rushed and potentially reducing your negotiating leverage.
The process generally begins with a comprehensive valuation to establish a credible asking price. From there, we would move into a confidential marketing phase, where we present the opportunity to a curated list of vetted, qualified buyers. After initial offers are received and negotiated, the chosen buyer conducts a formal due diligence review of your financials and operations. This is often the most intensive phase. An experienced advisor manages this entire process, anticipating requests and resolving issues to keep the deal on track toward a successful close.
Valuation
Determining what your practice is worth is the foundation of a successful exit. Buyers do not value your practice based on revenue or the profit shown on your tax return. They use a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
We calculate this by taking your net income and adding back owner-specific expenses like a high personal salary, car leases, or personal travel. For many practices, a reported $500,000 profit could translate to an Adjusted EBITDA of $700,000 or more. This figure is then multiplied by a number based on market conditions and practice-specific factors.
| Key Valuation Driver | Impact on Your Multiple |
|---|---|
| Provider Model | Higher for associate-driven practices; lower if 100% dependent on the owner. |
| EBITDA Scale | Practices with over $1M in EBITDA command significantly higher multiples. |
| Facility | Owning an ASC or having a modern, well-equipped facility increases value. |
| Growth | Demonstrating consistent year-over-year growth leads to premium offers. |
Because multiples are dynamic, getting an accurate, professional valuation is the only way to truly understand what your practice is worth in today’s market.
Post-Sale Considerations
The day you close the sale is not the end of your journey. It is the beginning of your next chapter. The right partner helps you plan for what comes after. A key concern for many physicians is losing control or seeing their practice culture change. However, control is not an all-or-nothing proposition. Many of todays deals are structured as partnerships.
You might be asked to “roll over” a portion of your proceeds as equity in the new, larger company. This gives you a stake in the future success and a potential second, often larger, payout when the new entity is sold again. The structure of your sale also has major implications for your after-tax proceeds. Careful planning can make a dramatic difference in your net financial outcome. Thinking about these elements early ensures the deal aligns with your personal, financial, and legacy goals.
Frequently Asked Questions
What are the key market trends affecting the sale of a plastic surgery practice in Los Angeles?
The key market trends include expanding demand for aesthetic procedures, the rise of combination procedures where patients seek multiple treatments at once, and a widening patient base including an increasing number of male patients.
How does owning an Ambulatory Surgical Center (ASC) impact the value of a plastic surgery practice?
Owning an on-site, certified Ambulatory Surgical Center (ASC) significantly increases the practice’s value and strategic appeal to buyers, as it demonstrates modern facilities and operational efficiency.
Who are the primary buyers for plastic surgery practices in Los Angeles, and what drives their interest?
Primary buyers include private equity groups and established portfolio companies looking to build regional or national platforms. They prefer practices with strong operations, multiple revenue streams, and growth potential.
What financial metric is most commonly used to value a plastic surgery practice during sale negotiations?
Buyers typically value practices based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which adjusts net income by adding back owner-specific expenses to reflect true operating profitability.
What is the typical timeline for selling a plastic surgery practice in Los Angeles, and why is it important not to rush?
The typical sale process takes four to six months. Rushing can signal desperation to buyers, potentially reducing negotiating leverage and sale price. A deliberate, well-structured sale maximizes value and smooth transactions.