What is a dermatology practice worth?

Dermatology was one of the first specialties private equity targeted, with rapid platform formation and add-on buying between 2015 and 2019, according to Scope Research. Announced deal counts peaked in the late 2010s and have held relatively steady since; Scope counts 39 announced deals by Epiphany Dermatology over the past five years, and more than 20 each by Pinnacle, Schweiger and DermCare. Scope's 2026 update prices the market in four tiers. Solo practices, typically under $2M of revenue, sell at 3x to 5x EBITDA because of operational risk and heavy reliance on the owner. Small groups of one to four locations, typically $2M to $15M of revenue, trade at 4x to 7x. Large and mid-sized groups at $15M to $50M of revenue, often with a mix of medical and cosmetic work, reach 7x to 10x, and large integrated platforms with continuing management teams 12x to 15x, especially if they have shown they can grow quickly with good unit economics. Scope sets the tiers by size; service mix appears in its list of factors that move a multiple. It names in-house pathology, Mohs surgery and cosmetic services as ancillaries that can boost margins, and counts cosmetic self-pay work as higher-margin and lower in payer risk, but it puts no number of turns on any of them. FTI Consulting's cost data complicates the margin point: citing 2019 benchmarking data, it puts operating expenses at 72.9% of net revenue for medical dermatology and 75.1% for cosmetic, although cosmetic brings in more revenue per physician (about $1.8M against $1.3M). Scope ties the low solo-practice multiple to reliance on the owner, and counts a stable group of physicians with succession plans in place as a factor that reduces post-close risk. For a dermatology group weighing a sale, fractional CFO support for dermatology covers the normalization and the location-level numbers a buyer asks for first.