Valuing Med Spas and Aesthetic Medicine Businesses in 2025: A Comprehensive Guide for Providers, Owners, Investors, and M&A Professionals

Will Hamilton
Feb 26
7 min read

The med spa and aesthetic medicine industry is rapidly expanding, fueled by rising consumer demand for non-invasive cosmetic procedures and a growing emphasis on wellness and self-care. This highly fragmented market has attracted increasing interest from private equity firms and strategic consolidators seeking to build scalable, branded platforms. M&A activity is driven by factors such as provider reputation, treatment mix, recurring revenue models, and geographic footprint, with premium valuations often awarded to multi-location operators with strong customer retention and advanced service offerings.

Whether you're preparing to sell a medical spa (med spa) or aesthetic medicine business, evaluating a partnership opportunity, or seeking to benchmark financial performance, this article explores the key valuation methodologies, drivers, and risk factors that determine the value of a med spa.

I. Industry Context: Why Med Spas are in Demand

The med spa and aesthetic medicine segment of the overall general wellness industry has experienced significant growth over the past decade. Increasing demand for non-invasive aesthetic treatments, such as Botox, laser skin treatments, and body contouring, have propelled the sector, leading to an uptick in M&A. With the increasing popularity of GLP-1s, many med spas have diversified their services to include weight-loss management, another fast-growing market segment, while others include broader wellness offerings such as nutrition counseling, fitness programs, and holistic therapies. The fragmented and fast-growing industry generally remains ripe for consolidation, although the vast number of very small providers with a wide variety of service offerings, operating models, and technological resources presents a significant challenge to investors. Currently, only 3% of med spas are owned by private equity firms or private equity-backed organizations.

Med Spa Market Growth

According to the American Med Spa Association, the industry grew from 8,899 locations in 2022 to 10,488 in 2023, representing a location growth rate of 17.9%. One (probably optimistic) source projects the global med spa market to grow at a 15.7% CAGR for 10 years from 2024 to 2033, reaching $83.9 billion of worldwide revenue by 2033, while it projects the U.S. med spa market to grow at a lower but still impressive CAGR of 14.7%, reaching $27.7 billion by 2033.

Key Growth Drivers

Below are a few of the key trends driving this growth:

Increasing demand for non-invasive aesthetic treatments
Growing focus on personalized treatments based on individual patient needs and preferences
Expansion of holistic wellness offerings, combining traditional spa treatments with medical procedures
Rise in medical tourism, particularly in countries with accredited healthcare facilities
Increasing adoption of advanced technologies for treatments and business management
Growing male clientele, with the number of males seeking aesthetic treatments tripling since 2000

II. Top Reasons to Get a Valuation of Your Med Spa or Aesthetic Medicine Practice

The following is a list of common reasons for commissioning a valuation analysis or appraisal of a med spa business:

1. Preparing for a Sale or Strategic Partnership

To establish a defensible asking price when marketing the business
To evaluate offers from private equity, strategic buyers, or joint venture partners
To understand how your business compares to market benchmarks

2. Internal Ownership Transition

For buy-in or buy-out of partners
To support fair and compliant equity allocation among owners
To plan for generational succession or family transfers

3. Compliance with Healthcare Regulations

To support Fair Market Value (FMV) and Commercial Reasonableness (CR) assessments required by Stark Law and Anti-Kickback Statute in deals involving ownership by other healthcare providers
To document compliance in joint ventures, especially when there is a referral relationships (hospitals, ancillary service providers, or other physicians)

4. Estate & Tax Planning

For gift or estate tax reporting to the IRS (especially for closely held businesses)
To support asset protection strategies
To plan for long-term wealth transfer or charitable contributions

5. Litigation or Dispute Resolution

For divorce proceedings involving business asset division
In shareholder or partnership disputes
For economic damages assessments in legal proceedings

6. Business Planning & Strategic Growth

To establish a valuation baseline for performance benchmarking
To support capital raise, refinancing, or line-of-credit applications
To identify value drivers and areas for operational improvement

III. Valuation Approaches for Med Spas

Valuation professionals typically apply three core methodologies to estimate the value of a med spa or aesthetic medicine business:

Income Approach (Discounted Cash Flow or Capitalization of Earnings)

This approach values a business based on the present value of its expected future earnings or cash flows. It’s most appropriate when a business has a stable operating history and predictable future performance.

Key assumptions include:

Normalized EBITDA or owner’s discretionary earnings
Growth rate assumptions (organic and acquisitive)
Risk-adjusted discount rate (typically 10–25% for med spas)
Capital expenditure needs

Pros: Based on the business’ future earning power

Cons: Sensitive to forecasting errors and discount rate subjectivity

Market Approach (Comparable Transaction Method, e.g. Market Multiples)

This method uses observed EBITDA multiples or revenue multiples from recent M&A transactions in the aesthetic medicine space. Typical multiples for small to medium -sized med spa and aesthetic medicine operators are within the range of 3x–12x EBITDA, depending on scale, service mix, and growth. This article includes more details and information about med spa multiples.

Pros: Easy to benchmark; useful in active M&A environments

Cons: Requires access to quality private market data and careful adjustment for practice size, margin, geography, and a variety of other factors

Asset-Based Approach

Used only when the business is underperforming or being liquidated. The value is derived from the net assets (e.g., equipment, leasehold improvements) minus liabilities.

Pros: Useful in distressed scenarios

Cons: Intangible value of the center can be difficult to quantify under this method

IV. Key Value Drivers in Med Spa Valuation

Several specific factors can materially influence a med spa or aesthetic medicine business' valuation multiple:

Earnings Quality

Buyers and valuation professionals place significant emphasis on normalized EBITDA and / or cash flow. Adjustments often include:

Owner compensation (if above/below market)
Non-recurring revenue or expenses
Related-party lease arrangements
Post-transaction adjustments
Out-of-period adjustments

Growth Potential

Discount rates and valuation multiples are a function of perceived risk and growth. Key considerations within the industry related to growth include the following:

Recurring Revenue Through Memberships and Packages: Subscription-based models and pre-paid treatment plans create predictable cash flow and customer loyalty, making the business more scalable and stable.
Expanding Consumer Demand for Aesthetic Services: Growing interest in non-invasive cosmetic treatments (such as injectables, laser treatments, and skin rejuvenation) driven by social trends and aging demographics suggests strong market tailwinds.
Strong Brand and Digital Presence: A recognizable brand, active social media engagement, and positive online reviews enhance visibility and customer acquisition, signaling potential for geographic and digital expansion.
Ability to Replicate Across Multiple Locations: Standardized service protocols, staff training, and operational systems indicate the business can be scaled into a regional or national platform, an important factor for private equity and strategic investors.
Upsell Potential with High-Margin Services and Retail Products: A diverse menu of high-margin procedures and branded skincare or wellness products offers opportunities to increase average revenue per client and overall profitability.

Risk Factors

Key considerations within the industry related to risk include the following:

Recurring Revenue Through Memberships and Packages: A strong base of clients on monthly memberships or pre-paid treatment packages provides predictable, stable income and reduces reliance on one-time visits.
Diverse and High-Margin Service Mix: Offering a broad range of profitable services (e.g., injectables, laser treatments, body contouring) minimizes dependence on any single procedure and cushions against demand shifts.
Licensed Medical Oversight and Regulatory Compliance: Proper medical supervision, adherence to state regulations, and clear protocols for scope-of-practice and consent reduce legal and regulatory exposure.
Experienced, Stable Provider Team: Retaining trained, credentialed injectors and aestheticians with loyal client followings helps maintain service quality and revenue continuity post-acquisition.
Strong Brand and Local Market Position: A positive reputation, high patient satisfaction, and strong online presence (e.g., reviews, SEO, social media) indicate durable demand and lower marketing risk.

V. Current Market Trends in Med Spa and Aesthetic Medicine M&A

The expectation of continued industry growth combined with a massively fragmented market has lead to an M&A boom, even if industry insiders are surprised there isn't more M&A activity. The number of publicly announced deals has exploded, increasing from a small handful in 2019 and 2020 to over 50 in each of the past two years. Deal announcements are dominated by private equity firms and platform companies as smaller owner / operator buyer acquisitions typically do not get announced publicly.

Cash Flow Multiples for Small Med Spa Businesses

There are a number of small med spa and aesthetic medicine businesses listed for sale currently, but it's difficult to glean much useful information from deals this small where the level of owner involvement is unclear. Our study of current and recently removed med spas for sale shows a range of multiples from 0.6x to 1.25x revenue and 2.1x to 3.9x cash flow at the 25th and 75th percentiles, with medians of 1x revenue and 2.9x cash flow.

Impact of Size on Med Spa and Aesthetic Medicine EBITDA Multiples

Large med spa and aesthetic medicine platforms offering cutting-edge technologies, like advanced laser treatments or exclusive proprietary skincare products, with strong, continuing management teams can command multiples in the 10x to 20x EBITDA range, especially if they are in a high-growth phase with a demonstrated ability to expand through de novos or by acquisition. While publicly-disclosed financial information is sparse for this portion of the market, our databases include a handful of precedent deals, including reported EBITDA multiples of up to 20x, a figure which likely implies significant purchase consideration for recently opened / under development de novos and full-year impact of recent acquisition and possibly the M&A pipeline.

VI. Final Thoughts: Keys to Maximizing Value

If you're a med spa owner or executive planning to explore a sale or equity partnership, consider the following strategies to enhance your valuation:
- Build a Recurring Revenue Model Through Memberships and Packages: Offer subscription-based memberships, pre-paid treatment plans, and loyalty programs to create predictable, recurring revenue and increase client lifetime value.
- Develop a Scalable Brand and Operational Infrastructure: Standardize service protocols, branding, training, and software systems (e.g., scheduling, CRM, EMR) to support multi-location expansion and appeal to buyers seeking platform growth.
- Diversify and Optimize Service Mix: Focus on high-demand, high-margin services like injectables, laser treatments, and body contouring, while continually evaluating emerging trends to stay competitive.
- Build a Strong Digital Presence and Lead Generation Engine: Invest in SEO, social media, online reviews, and client retention tools to drive new patient acquisition and boost brand visibility—key to sustainable growth.
- Professionalize Financials: Buyers prefer accrual-based, GAAP-compliant statements.
About HealthFMV
HealthFMV specializes in appraising healthcare businesses and services arrangements, including med spas and aesthetic medicine practices.
- Business Valuation: We perform independent, third-party valuations of healthcare businesses to document regulatory, tax, and financial reporting compliance, resolve ownership disputes, and help ensure both parties to the transaction are comfortable with the financial terms.
- Transaction Advisory: We work with healthcare business owners, organization executives, providers, and their health lawyers to develop transaction structures and deal terms that further their business objectives while maintaining compliance with the complex healthcare regulatory environment.
- Services Arrangements: We prepare fair market value and commercial reasonableness opinions for a variety of healthcare services arrangements including management services, hospital-based specialty stipends, case rates and PC/TC splits, block leasing, and shared savings distributions, among others.
Contact Will Hamilton at whamilton@healthfmv.com with questions about our healthcare valuation services or to discuss your specific situation. Visit scoperesearch.co for more information about our healthcare M&A research services.