Selling To A MSO or P.E.?
Don't Go At It Alone.

Maximize Your Value When Selling Your Dermatology Practice To A MSO or Private Equity

Thinking of Selling To PE? Don't go at it alone.

At 1st Med Transitions, we know that Selling to a MSO (Management Service Organization) or a Private Equity firm without the right expertise and guidance can be a daunting task. There are a number of factors to consider and our Dermatology Sale Advisors are well aware of the benefits and the pitfalls to avoid. As the List of Dermatology MSO and PE Companies in the market has grown, so has our relationships with local, regional and national MSO's and Private Equity firms.

When selling to or affiliating with a Managment Service Organization, you have the potential for a much larger selling valuation for your practice than in a traditional doctor-to-doctor / private transactions. We have seen as much as 125% to 300% of yearly revenue and up to 10X Adjusted EBITDA. However, it is important to keep in mind that there is more to a sale, than just the price. A MSO Dermatology Group will typically require a seller to continue to work at the practice post sale for a pre-determined amount of time (usually 3 - 5 years). This length of employment commitment will also affect the valuation and how the sales price monies are disbursed to the seller.

If you have a larger Dermatology practice, there is a good chance you have already received unsolicited offers or been contacted from MSO Dermatology Groups attempting to negotiate with you directly. We understand this can be tempting, but there is a chance that you will be missing out on more favorable deal terms/structure and a higher overall sales price. Partnering with or selling to a MSO or PE Backed Group is an enormous decision for a Dermatology practice owner and not something you should undertake without the proper representation.

When you sell to a MSO Dermatology Group with 1st Med, we make sure to walk you through every step of the sales process.

Our MSO / PE-Backed Sales Process:

STEP #1  Sales Consultation

This is the first and most important step in the process. We will discus your goals, objectives and timeline for sale and of course, answer any questions you may have. We will asses your current situation and determine if your practice is a good DSO candidate. We'll inform you on what MSO's are looking for and the different deal structures we are actively seeing in the marketplace.

STEP #2 EBITDA Practice Valuation (no cost)

If we think you are a good MSO / PE transition candidate, your transition advisor will request financial's, practice reports and a practice profile to be provided. We will work with you to determine a current EBITDA valuation as this is the main metric the corp. buyers use to value your practice. Many of our industry competitors charge between $7K and $15K for their EBITDA analysis. At 1st Med, we never charge up-front fees and only earn our commission when your practice is sold!

STEP #3 PE/MSO Outreach

We'll package and confidentially present your Dermatology practice in a professional and secure manner to potential buyers. Our goal is to maximize the interest and pool of potential MSO and PE-Backed buyers for your Dermatology. The more competition we can generate, the higher the potential for sale, preferred deal structure and maximum enterprise value.

STEP #4 Review Offers

One of the most overlooked part of the Dermatology Corporate Sales process is the deal strucure negotiation. We'll assist you in reviewing multiple offers and help determine which is the best fit for you personally and your practice moving forward. Remember, not all offers are created equal and the same goes for MSO's.

STEP #5 Due Diligence

Once you have determined the best deal structure and culture for your practice, we'll accept the LOI and move into Due Diligence. The difference between a closed transaction and a failed one, can many times comes down to the attention to details. Corporate Buyers are more sophisticated than independent Dermatology owners and the due diligence process is typically more thorough. We will work with the buyer on third-party quality of earnings review, detailed practice reports, and sales contract negotiations.

STEP #6 Closing

There are a number of aspects that lead to a successful closing - deal structure, non-competes, escrow, representations and warranties and transitions agreements. We stay on top of every step in the process from the marketing, letter of intent, due-diligence to the purchase & sale agreement and ultimately closing.

If you are considering selling your Dermatology practice to a MSO / PE-Backed group, or just want to get a sense of what a potential corporate sale would look like for you and your practice, we would be happy to discuss further.

To get started, complete our Dermatology Sales Consultation Form Here and you can schedule a call with one of our Senior Transition Advisors.