The American Society for Dermatologic Surgery (ASDS) recently reported that close to seventy percent of consumers in the United States have considered some form of surgical or cosmetic enhancement to their physical appearance. The ASDS Consumer Survey on Cosmetic Dermatologic…
The American Society for Dermatologic Surgery (ASDS) recently reported that close to seventy percent of consumers in the United States have considered some form of surgical or cosmetic enhancement to their physical appearance. The ASDS Consumer Survey on Cosmetic Dermatologic Procedures revealed that the percentage of consumers open to undergoing a cosmetic medical procedure has nearly doubled in the past four years.
Technological advancements in cosmetic surgery have resulted in the adoption of minimal and non-invasive techniques, even as attitudes towards cosmetic procedures change, and purchasing power increases. This is why cosmetic dermatology has become one of the fastest growing sections of the dermatology industry, with the popularity of procedures such as Botox injections, lip fillers and chemical peels on the rise. Procedures like these have proven to be a high-growth area for the industry, and continue to contribute to its consistently high profit margins.
The International Society of Aesthetic Plastic Surgery (ISAPS) has reported a nine percent increase in surgical and non-surgical cosmetic procedures over the past year, globally. According to the results of their most recent Global Aesthetic Survey, the United States leads the world in having the most number of cosmetic procedures conducted per year, followed by Brazil, Japan, Italy and Mexico. Together, these five countries account for nearly forty-two percent of the world’s cosmetic procedures. Other big spenders in the market include Russia, India, Turkey, Germany and France. Women account for eighty-six percent of cosmetic procedures worldwide.
Given that the industry is promising greater returns year after year, financial buyers have been actively seeking out dermatology practices. Out of two hundred private equity acquisitions of medical practices in the United States in the past two years, thirty have been dermatology practices. With cosmetic dermatology becoming a fast growing specialization, and plastic surgery businesses increasing in number, the fragmented industry is ripe for consolidation.
In May this year, Goldman Sachs acquired a majority stake in California Skin Institute, one of the largest dermatology practices in California. The firm had also invested in Forefront Dermatology in an earlier transaction. In June, Triangle Capital closed a $20 million debt investment in Schweiger Dermatology, one of the largest providers of dermatology services in New York.
Other recent deals include private equity firm Harvest Partners’ purchase of Florida-based Advanced Dermatology & Cosmetic Surgery, and Bain Capital’s investment in Hugel Inc, which allowed the firm a significant share of the South Korea Botox market. Hugel is a manufacturer and exporter of the botulinum toxin labelled Botulax, to twenty-four countries and is ranked first in terms of sales in the local neurotoxin market.
With an increasing number of financial buyers competing for acquisition targets, alongside strategics, who are also looking to consolidate, we can expect investor interest to remain high in 2017, carrying on into the next year.
To gain access to investment opportunities in the healthcare and dermatology services sector, sign up for a free trial on BankerBay.