What is a med spa worth?
A med spa valuation is the enterprise value buyers assign to a medical aesthetic practice based on EBITDA, growth rate, and service mix.
Quick answer
Med spas typically sell for 4x to 7x EBITDA for single-location and add-on acquisitions, and 6x to 9x EBITDA for multi-location platforms, with valuations heavily weighted toward recurring membership revenue and provider retention.
The detail
Med spa valuations have a wider range than most outpatient verticals because of variability in physician ownership structures, provider retention risk, and member retention rates. Single-location and add-on med spa acquisitions typically trade at 4x to 7x EBITDA. Multi-location platforms trade at 6x to 9x. Valuation drivers include percentage of revenue from recurring memberships (premium for 30 percent or more), injectable revenue per visit, retention rate above 60 percent, and provider tenure. Discount factors include heavy reliance on a single injector, rented equipment, and high marketing spend as a percentage of revenue. Corporate practice of medicine structures vary state by state and require careful diligence.
AmSpa reported the average med spa generated $1.4M in revenue in 2023 (AmSpa 2024 State of the Industry, reflecting 2023 data).
Source: AmSpa State of the Industry
Recurring membership programs typically lift retention from 40 percent to 70 percent or more.
Source: AmSpa industry data
Injectables (botulinum toxin and fillers) typically represent 40 to 60 percent of revenue at a mature med spa.
Source: AmSpa benchmarks
What this means for clinic owners
From Sorso
Provider concentration is the single biggest valuation discount in med spa M&A. If 60 percent of your revenue comes from one injector, expect a buyer to discount the offer by 20 to 30 percent or structure heavy earnouts.
Related questions
How much does it cost to start a med spa?
Starting a med spa typically costs $250,000 to $750,000 in initial capital, including buildout, equipment, working capital, and licensing, with most owners spending $400,000 to $600,000.
What is a dermatology practice worth?
Dermatology practices typically sell for 7x to 10x EBITDA for single-location and add-on acquisitions, and 12x to 15x EBITDA for multi-location platforms, with cosmetic-heavy practices commanding the highest multiples.
How do PE firms value medical practices?
Private equity firms value medical practices primarily on a multiple of trailing twelve-month adjusted EBITDA, typically 5x to 12x, with the multiple driven by scale, growth, payer mix, and provider retention.
How do I evaluate a PE offer?
Evaluate a PE offer on six dimensions: enterprise value multiple, cash at close percentage, rollover equity terms, post-close compensation structure, earnout conditions, and platform exit timing assumptions.
Founder of Sorso. 19 years in corporate finance. Managed a $450M loan portfolio before building a fractional CFO firm exclusively for healthcare clinics.
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