Medical spas, or MedSpas, are hybrid establishments combining the luxury of a traditional spa with medical-grade aesthetic procedures. As an intersection of health, beauty and medicine, MedSpas have seen a surge in popularity in recent years. As wellness and aesthetic care continue to gain prominence in the daily lives of millions, MedSpas have become a focal point for M&A, reflecting a robust market landscape poised for further growth.
The MedSpa sector’s prominence was evident at various healthcare conferences attended by the LevinPro HC team in 2024. During McGuireWoods’ 17th Annual Healthcare Finance and Growth Conference in September 2024, Eugene Goldenberg of Edgemont Partners commented:
“People are betting on vanity. The med spa and aesthetic space continues to be all the rage, with new sponsors entering the market nearly every week. It feels very much like a land-grab opportunity. Currently, there are about 20 private equity platforms in this space, and it’s still early innings. Many firms are approaching this with a pretty aggressive de novo strategy, reminiscent of what we saw with urgent care and autism services in the past.”
Similarly, Craig Castelli of Caber Hill Advisors also noted during the McGuireWoods conference:
“Med Spa was a surprise a year or two ago, but at this point, it’s no longer a secret.”
Although the MedSpa market is typically an area we do not cover at LevinPro HC, due to its focus on non-medical, aesthetic services rather than traditional healthcare, we have decided to dive a little deeper into this sector to understand what exactly is driving activity in the sector.
The primary driver behind MedSpa M&A activity is the escalating demand for non-invasive cosmetic procedures, fueled by a focus on personal appearance and health consciousness. Consumers are increasingly willing to invest in aesthetic enhancements like laser hair removal, Botox injections and body contouring, especially with rising disposable incomes supporting these luxury treatments. Technological advancements further propel this growth, as MedSpas adopt innovative treatments that enhance both efficacy and safety, attracting more clients and making these establishments lucrative for investors interested in new tech integration.
Additionally, the market’s fragmentation, with more than 66% of MedSpas being under single ownership as of 2024 according to the 2024 Medical Spa State of the Industry Report by the American Med Spa Association, offers substantial opportunities for consolidation. This allows investors to merge or acquire smaller practices, streamline operations and expand market share. Demographic trends also play a pivotal role; an aging population seeking anti-aging solutions alongside a growing demographic, both male and female, interested in aesthetic services broadens the consumer base, diversifying service offerings and boosting M&A appeal.
Navigating the complex regulatory environment presents both challenges and opportunities, requiring strategic deal structuring to comply with varying state laws on medical practice ownership. A key factor is the Corporate Practice of Medicine doctrine, which differs by state but generally restricts non-physician ownership of medical practices. To work within these constraints, investors often employ strategies like management service organizations or physician partnerships, allowing for compliant acquisitions while enabling growth.
Additionally, the surge in wellness tourism has positioned MedSpas as key attractions for travelers, encouraging strategic investments in new markets to capitalize on this global interest. In the United States, cities such as Miami, with its luxury spa culture and accessibility, Los Angeles, where Hollywood drives aesthetic trends, and New York City, a global hub for fashion and beauty, have emerged as hotspots for MedSpa medical tourism. According to American Med Spa Association’s 2024 report, the U.S. medical spa industry saw an increase from 1,600 facilities in 2010 to a projected 11,553 by 2025, reflecting a significant growth in demand for these services. These destinations blend aesthetic medical treatments with vacation experiences, attracting clients looking for both rejuvenation and a taste of local culture, highlighting a trend where medical procedures are increasingly part of a broader travel itinerary.
According to market research, the global MedSpa market was forecasted to reach $22.2 billion by the end of 2024 and grow to $83.9 billion in 2033, with a compound annual growth rate (CAGR) of 15.7%, indicating not just a burgeoning interest but a sustained growth trajectory.
Among the most active players in the MedSpa M&A market in 2024, Princeton Medspa Partners led with three acquisitions (Ridha Plastic Surgery & Medspa, Pure Skin Aesthetic & Laser and Mirabile Beauty, Health & Wellness), demonstrating a clear strategy for growth through consolidation.
MedSpa 2025 Outlook: Trends and Advice from Industry Experts
As Alex Veach, Director of Transaction Services at Austin, Texas-based Agenda Health, shared in a recent interview, MedSpa M&A activity is expected to intensify through 2025.
“Our firm had the opportunity to advise on several MedSpa transactions in 2024, and we expect to see that trend grow even stronger in 2025,” said Veach. “The space has seen several healthcare investors acquire aesthetics platforms in 2023 and 2024 – we think these buyers will aggressively pursue acquisition opportunities to grow their platforms over the course of 2025. This will create a great exit environment for owners looking to exit.”
Regarding what sets MedSpa transactions apart from other healthcare deals, Veach highlighted the unique value placed on ownership and provider reputation in the space:
“Every sector of healthcare services is different and requires deep experience to facilitate successful exits. There are a myriad of examples for this in the MedSpa space, but one key factor in our MedSpa transactions that differentiates it from others we work in is the emphasis aesthetic businesses place on their owners and providers. Buyers in this space place a high value premium on practices with owners and providers that have a great reputation in their communities, and in our transactions, will look to make sure they can construct partnerships with owners in a way that aligns incentives and empowers them with resources to expand their reputation and brand into new markets.”
Veach also offered valuable advice for prospective buyers looking at the MedSpa space:
“In our experience, being willing to pay a premium for the right brand can make all the difference for buyers looking to build a platform in the space. Since this space is so reputation-centric, buyers who are willing to pay up for the right brand with great owners attached will set themselves up for success as they build their platform.”
Looking ahead to 2025 and beyond, the MedSpa sector will continue its rapid expansion, driven by strong consumer demand and advancements in aesthetic technology. Private equity firms and strategic buyers remain highly engaged, drawn to the sector’s high-margin services and recurring revenue potential. As competition intensifies, investors will likely focus on consolidation and scaling operations to strengthen their market positioning.
Regulatory complexities, particularly state-specific laws governing medical practice ownership, will continue to influence deal structuring and acquisition strategies. Additionally, the growing influence of medical tourism and continued innovation in non-invasive treatments could further shape the market. With sustained consumer interest and financial backing, the MedSpa industry is poised to remain a profitable segment within the broader healthcare and wellness landscape.
