Blog, Med Spa
Jun 6, 2024

Using an Investment Banking Firm to Sell Your Medical Spa

Considerations for Medical Spa Practice Sellers

If you’re in the industry, it’s not difficult to see why medical aesthetics is one of healthcare’s hottest investor markets. As the market continues to attract private equity interest, many medical spa owners are picturing what it might be like to sell their businesses for the first time. Some are already fielding offers. If you’re a med spa owner positioned to sell, there are a few pivotal decisions you’ll need to make prior to entering the sale process. One of the most important will be assembling the team you need to sell your business. This includes legal counsel, accounting, wealth management, your internal executives, and of course, an investment banking firm. 

The right representation is key to a successful sale. Without it, sellers risk leaving money on the table, missing opportunities to meet more buyers, not negotiating sale terms to their full potential, or having the deal fall through entirely. 

In this article, we outline the many benefits of working with an investment banking firm to sell your business. And, why an investment banking firm can drive more value to a sale than other brokers or advisors. 

We have a wealth of resources when it comes to selling your medical aesthetics practice and understanding the market. Check out a few of these articles to learn more about buying and selling in the medical aesthetics space. 

Benefits of Working with An Investment Banking Firm to Sell Your Medical Spa

Experience

There are many types of M&A brokers, but they don’t all come equipped with the same type of experience. Investment banking firms have the sophisticated sale and transaction experience to guide sellers through a classical M&A process. In simple terms, investment bankers speak the language of a business transaction. 

This fluency is crucial when orchestrating the needs of buyers, attorneys, accountants, and the numerous complexities involved in selling a business. Investment bankers can keep the deal moving forward with clear communication. And, they remove a huge burden of time and stress from the seller. 

Medical Aesthetics Expertise

Beyond transaction experience, a specialized investment banking firm will also have vast industry and market knowledge of medical aesthetics. This rapidly evolving market comes with unique challenges: 

  • Compliance and regulation issues that vary by state
  • Complex ownership considerations (physicians and non-physicians)
  • Rapidly growing patient demand
  • High fragmentation
  • Advancing services and technology, and more!

Without an intricate understanding of the space, advisors won’t be able to truly understand the nuances of each business, offer a true valuation, or introduce many options for best-fit buyers. 

Higher Valuations

For sellers, one of the greatest benefits of working with investment bankers is the potential for gaining more value from a sale. This isn’t just anecdotal. At Skytale, we’ve helped clients who come to us with LOIs in hand achieve 40 to 50 percent higher values. By driving more value in a sale, an investment banking firm can pay for itself–and more. 

Buyer Network

Experienced investment bankers are armed with an extensive buyer network. Part of a classical M&A process is the marketing phase, where an investment banking firm will present a seller to the best-fit buyers in their network–often 75 or more. The scope of this network as well as the curated relationships and trust in the investment banking team can help sellers drive more competitive offers. And, it can help them find the right partner to carry on their business’s legacy.

Negotiation of Deal Structure

Beyond the sale price or cash at close, there are many components of the deal structure that need to be negotiated between a buyer and seller. From the owner’s employment terms to earn out to equity, sellers can help shape what they want their post-close future to look like. Investment bankers invest in a deep understanding of their clients’ vision, and help them structure a deal with the right partner to carry it out. 

Fiduciary Responsibility

A final benefit of working with an investment banking firm is the added fiduciary responsibility that comes with licensing. As opposed to other brokers, investment bankers registered with FINRA (Financial Industry Regulatory Authority) member firms. This means an investment banker’s services will be regulated to ensure fairness and honesty. This adds a layer of protection and peace of mind for both sellers and investors during the sale. 

Skytale Group is an Investment Banking Firm for Medical Spas

Selling your business is one of the greatest milestones of your career. Having the right advisors in your corner can help lead to a successful sale. At Skytale, we have a team of licensed and registered professionals to ensure that all services that we offer invoicing securities meet applicable regulations, an important distinction when interviewing investment banks and advisors. Contact us to learn more.

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