Olympus Cosmetic Group, a managed service organization, is keen on acquisitions as the cosmetic surgery and medical spa market is ripe for consolidation, said Aditya Govil, board member of Olympus.

In May 2023, VSS Capital Partners made a growth investment into Boca Raton, Florida-based Olympus, a newly formed platform providing comprehensive cosmetic surgery, dermatological treatments, medical spa and non-surgical cosmetic procedures, said Govil, who is a vice president at VSS.

Olympus is evaluating potential opportunities primarily in the Southeast markets, he said. The platform is in various stages of discussions with potential targets, said Govil, declining to disclose if Olympus has signed any letters of intent (LOIs). Olympus has access to capital through VSS to complete deals, he said.

Olympus is interested in accretive cosmetic surgery and medical spa opportunities with a solid reputation and the capacity to expand practices by adding new surgeons, he said. Additionally, it prefers partner surgeons who will stay with the business as opposed to those looking for a path to retirement, he said. It also prefers practices that provide cosmetic surgery procedures as opposed to focusing only on non-surgical medical spa services. Post-acquisition, Olympus can easily help the partner doctors add non-surgical services if the target practice does not offer it, he explained.

Valuations broadly across the cosmetic surgery and dermatology market range from 13x-14x EBITDA up to 20x EBITDA, said Govil. For add-on practice deals generating in the range of USD 3m-USD 4m EBITDA, multiples fall in the 7x-8x EBITDA range, he said.

The cosmetic surgery and med spa market is highly fragmented with many solo or double practitioner practices, he said. Unlike ophthalmology or dentistry, which has seen significant consolidation by private equity in recent years, the cosmetic surgery and medical spa market is still in the early innings of consolidation, representing growth upside for its platform, said Govil.

The US cosmetic surgery market is expected to reach USD 29.2bn in 2031, due to the increased demand for and societal acceptance of cosmetic surgery and medical spa services, thus representing a significant growth opportunity for Olympus, he explained. Additionally, the cosmetic surgery market is a pre-paid cash model as compared to other healthcare services that are limited by reimbursement rates, thus making the market an attractive investment.

Olympus aims to offer end-to-end cosmetic surgery and aesthetics services from surgery to non-surgical treatments as well as weight loss programs paired with complementary skin tightening services, said Govil.

Olympus operates eight locations in Alabama, Florida, Georgia and Oklahoma, said Govil. In May, Olympus announced it acquired Atlanta-based Artisan Plastic Surgery and Artisan Beauté. Terms were not disclosed.

VSS invests USD 20m-USD 50m in lower middle-market healthcare companies, among other sectors, with EBITDA of USD 3m-USD 15m, according to its website.

Olympus specializes in offering face lift, abdominoplasty, breast augmentation, breast lift, liposuction, injectables, non-surgical aesthetic treatments and body contouring procedures and services, according to the company.