Med Spa M&A and Private Sales: A Look Back at 2025—and What Lies Ahead
By Tommy Newton, Principal, Xite
The med spa M&A and private sale market in 2025 continued to mature and professionalize, even as broader healthcare deal volume softened. While there were fewer headline-grabbing “mega deals,” transaction activity remained strong—particularly in the form of add-on acquisitions. Private equity-backed platforms and MSOs remained highly active, especially in large and fast-growing states such as Florida, Texas, and California. The overwhelming majority of med spas—greater than 90%—remain independently owned, which continues to fuel consolidation rather than one-off blockbuster transactions.
Consumer demand was the foundational driver throughout 2025. Demand for injectables, laser treatments, skin rejuvenation, and non-surgical body contouring continued to grow at mid- to high-single-digit rates, reinforcing investor confidence in the sector. Med spas benefit from being largely cash-pay businesses with limited reimbursement risk, and buyers remain attracted to predictable margins, loyal patient bases, and recurring treatment patterns. Membership programs, subscription skincare, and repeat injectable visits have become increasingly important, creating annuity-like revenue streams that reduce volatility and perceived risk.
Valuations in 2025 largely followed established patterns, with meaningful differentiation based on size, scale, and operational sophistication. Smaller med spas with under $4 million in revenue typically traded in the 3x to 6x EBITDA range, reflecting higher owner reliance, operational concentration, and continuity risk. Mid-sized med spas generating $4–20 million in revenue generally achieved 5x to 8x EBITDA, while larger regional platforms exceeding $20 million in revenue commanded multiples ranging from 7x to 12x EBITDA. In select cases—particularly for premium brands with rapid growth, strong leadership teams, and scalable infrastructure—multiples reached the upper end of that range. Buyers continue to pay for quality, not just topline growth.
Deal structures in 2025 remained flexible, particularly among private equity-backed buyers and MSOs. Most transactions fell within a range of approximately 60% cash at close and 40% rollover equity or stock, up to 80% cash and 20% rollover equity or stock. The precise mix depended heavily on the buyer’s perception of risk, growth visibility, and patient and provider retention. Holdbacks and earnouts remained common, especially where future performance, physician/provider transition, or post-close growth initiatives were key components of the investment thesis. Buyers are still willing to be creative—but their primary objective remains risk mitigation.
Regulatory and legislative considerations also played a larger role in diligence and deal execution during 2025. While med spas generally operate outside traditional physician practice management (PPM) and corporate practice of medicine restrictions, increased scrutiny around scope of practice, injectable supervision, and MSO structures—particularly in states like California—caused buyers to demand cleaner compliance documentation and clearer operating models. Both state- and federal-level legislative changes remain a variable that can influence valuations and deal timing, reinforcing the importance of proper legal structure and proactive compliance.
From an investor perspective, what matters most has become increasingly clear. Buyers are prioritizing recurring revenue, strong EBITDA margins, consistent patient growth and retention, provider retention, investment in technology and AI, clean financial reporting, and teams that can operate independently of a single owner. Multi-location operators—particularly those with three to eight or more sites, centralized administrative functions, and standardized operating procedures—continue to attract the most competitive interest. Private equity groups are not simply buying locations; they are buying scalable platforms.
Looking Ahead: 2026–2027 and the Recapitalization Cycle
As we move into 2026 and 2027, one of the most important dynamics the entire industry will be watching is the recapitalization cycle of several large private equity-backed med spa platforms. Groups such as Empower Aesthetics (Shore Capital), Alpha Aesthetics (Thurston Group), Advanced MedAesthetic Partners (Leon Capital), and Well Labs+ (backed by Camino Partners and founded by Daniel Lubetzky of KIND Snacks and Shark Tank) are among the platforms attracting significant attention. These are sophisticated, well-capitalized investment firms with extensive track records in executing healthcare rollups.
When these platforms recapitalize—and most observers expect that they will—it could trigger another wave of aggressive acquisition activity. A successful recapitalization at strong valuations would validate the private equity thesis in medical aesthetics and likely lead to renewed buying intensity, increased competition for quality assets, and upward pressure on valuation multiples across the sector. Historically, strong platform exits tend to create confidence and momentum, which then cascades into additional capital flowing into the space.
Med spa owners who partnered early with groups like these are positioned favorably. Early-stage partners often benefit from equity rollover appreciation as platforms scale, improve margins, and expand geographically. If recapitalizations perform as expected, those early equity holders could see meaningful financial upside.
On the other hand, if recapitalizations were to occur at lower-than-expected valuations, it could temporarily slow consolidation activity and create downward pressure on multiples. However, there are currently no meaningful indications that this scenario is likely. The private equity firms behind these platforms manage billions of dollars and have extensive track records of building and exiting healthcare services rollups successfully. The fundamentals of the industry—strong consumer demand, high margins, recurring revenue, and fragmentation—remain intact.
In addition to recapitalizations, interest rate policy will remain a critical variable. Further Federal Reserve rate reductions would lower the cost of capital and typically support higher valuations and increased deal activity. Conversely, unexpected macroeconomic shifts or legislative changes at the state or federal level could impact financing conditions and compliance requirements, which in turn may influence transaction timing and pricing.
The overall outlook remains strong. The med spa industry continues to benefit from durable consumer demand, scalable operating models, and significant consolidation opportunities. If recapitalizations unfold as anticipated and capital remains accessible, 2026 could very well become a record-setting year for transactions. For med spa owners, the opportunity is real—but preparation, compliance, and disciplined execution will continue to separate premium outcomes from average ones.
– Tommy Newton, Principal, Xite
About Xite
Xite is a leading sell-side M&A, practice brokerage, and real estate firm representing healthcare providers nationwide. We specialize in helping dental, medical, MedSpa, plastic surgery, dermatology, urgent care, and FEC owners sell their practices, find private equity partners, or execute strategic growth plans. Our data-driven approach, industry relationships, and deep transaction expertise ensure that our clients achieve optimal outcomes while maintaining confidentiality and control throughout the process.
For more information, visit https://www.xiteco.com/.