How to Sell a Dermatology Practice in 2026

Dermatology has been the most aggressive PE roll-up in physician services for the better part of a decade. More than 15 PE-backed derm platforms are actively acquiring practices in 2026, and despite the cooling in healthcare M&A broadly, quality derm practices with Mohs surgeons and dermatopathology still command 10-14x EBITDA from platform buyers. The catch: the deal structure is complicated, the retention requirements are long, and the MSO/PC architecture that makes these deals possible is unfamiliar to most selling physicians.

If you own a dermatology practice and you're thinking about selling to private equity in the next 2-3 years, here's what you need to understand about how these deals actually work.

The Active Derm PE Platforms in 2026

The buyer universe is deep. You should expect a competitive process to reach at least 6-8 of these platforms:

• Schweiger Dermatology Group (backed by NMS Capital) — aggressive in the Northeast and Mid-Atlantic.
• U.S. Dermatology Partners (ABRY Partners) — national platform, strong in Texas and the Midwest.
• Forefront Dermatology (OMERS) — Midwest heavyweight with strong Mohs and dermatopathology integration.
• Advanced Dermatology & Cosmetic Surgery (ADCS) (Harvest Partners) — largest single platform nationally.
• Epiphany Dermatology (Spanos Barber Jesse) — Texas-based, growing in the South.
• Pinnacle Dermatology (Chicago Pacific Founders) — Midwest and Southeast.
• QualDerm Partners (Thurston Group) — Southeast-focused.
• Anne Arundel Dermatology (Ridgemont Equity).
• Riverchase Dermatology (Kohlberg & Company).
• Dermatology Associates / various regional platforms backed by Audax, Golub, and others.

Platform multiples have compressed from the 2021 peak but remain strong: bolt-ons at 8-11x EBITDA, platform-quality groups at 11-14x, and occasional outliers at 15x+ for strategically important assets. For context on how these multiples compare across healthcare, see our industry multiples guide.

Understanding the MSO/PC Structure

Every PE-backed derm deal uses a Management Services Organization (MSO) structure. This exists because most states have Corporate Practice of Medicine (CPOM) laws that prohibit non-physicians (and by extension, PE funds) from owning medical practices directly. The workaround:

• The clinical practice remains in a Professional Corporation (PC) owned by a physician (often called a "friendly PC" or "nominee PC").
• The PE platform owns the MSO, which provides management, administrative, billing, HR, IT, marketing, and non-clinical services to the PC under a long-term Management Services Agreement (MSA).
• The MSA typically requires the PC to pay the MSO a fee equal to substantially all of the PC's non-physician compensation economics — effectively transferring the practice's profit to the MSO, where PE can own equity.
• The selling physicians become employees of the PC under new employment agreements, typically at market-rate compensation that's lower than their pre-deal owner draws.

The compensation reset is where sellers get blindsided. If you were taking home $1.2M per year as owner, your new employment comp will likely be $450-650K plus production-based bonuses. The difference between your old comp and the new comp is what's being capitalized in the EBITDA the buyer is paying for. This is legitimate — the whole point is that the buyer is buying the arbitrage between owner comp and market comp — but you need to understand it going in.

Retention Requirements: The 3-5 Year Commitment

Every PE derm buyer will require the selling physicians to sign employment agreements of 3-5 years minimum, with some platforms pushing for 7+ years for senior physicians. These are not negotiable — the buyer is paying 11x EBITDA on the assumption that you'll be there generating it for the entire hold period.

Standard terms include:

• Non-compete radius of 10-25 miles, 2-3 years post-employment, enforceable where state law permits.
• Non-solicitation of patients and employees, 2-3 years.
• Forfeiture provisions — if you leave before the end of your employment term, you forfeit deferred compensation, rollover equity gains, and sometimes claw-back portions of the sale proceeds.
• Equity rollover of 15-30% of your sale proceeds into the MSO's equity. This is presented as optional but is functionally required for selling physicians.
• Call/put rights on your rollover equity tied to termination events.

The equity rollover is actually the most important wealth creation lever. If the PE platform sells to a larger platform in 3-5 years (which is the plan), your rollover equity can double or triple in value. The best derm sellers I've worked with made more money on their rollover than on their cash at close. But this only works if you're rolling into a well-managed platform with realistic growth prospects.

What Buyers Actually Value in a Derm Practice

Not all derm practices are created equal. Buyers pay premium multiples for:

• Mohs surgery volume — Mohs cases generate the highest-margin revenue in derm, and every platform wants more of them. A practice with 2+ Mohs surgeons doing 1,000+ cases per year is a trophy asset.
• In-house dermatopathology — keeping pathology internal captures 15-30% incremental margin per biopsy. Practices with their own path lab (and a board-certified dermatopathologist) get premium multiples.
• Multi-provider model — practices where physicians generate less than 70% of revenue (with PAs/NPs handling routine visits) scale better and attract higher multiples.
• Diversified payer mix — strong commercial, limited Medicare exposure on non-Mohs work, minimal Medicaid.
• Multi-site footprint — 4+ locations signal operational maturity and create a real platform opportunity.
• Cosmetic/aesthetics revenue stream — Botox, fillers, lasers, skincare. Provides cash-pay revenue that buyers love for the margin profile.

The Mohs Concentration Risk

Here's an issue that trips up many derm sellers. If your practice has a single Mohs surgeon generating $1.5M+ in Mohs revenue, and that surgeon is you or is approaching retirement, buyers will see concentration risk and either discount the multiple or require an extended employment commitment from the Mohs physician specifically.

The solution, if you have time: bring on a second Mohs surgeon 12-24 months before sale. The hiring market for Mohs surgeons is tight (the AMSL/ACMS fellowship pipeline produces only ~100 new Mohs surgeons per year), but a 1099 or part-time arrangement is often workable. Even distribution of Mohs volume across two surgeons can add 1-2 turns to the multiple.

The CMS Reimbursement Risk

Every buyer will ask about your exposure to Medicare reimbursement changes. CMS has been gradually cutting Mohs reimbursement rates (CPT 17311/17312/17313/17314) and targeting what they view as overutilization of certain skin procedures. Buyers model scenarios where reimbursement drops 5-15% over the hold period, and they price that into their bids.

What you can do: document your utilization patterns, appropriateness-of-care protocols, and compliance with AAD/ACMS appropriate use criteria. A practice that can show disciplined case selection and solid pathology correlation on Mohs cases will be viewed as lower-risk.

EBITDA Normalization and the Add-Back Conversation

Buyer EBITDA and seller EBITDA are rarely the same number on day one. The major normalizations in a derm deal:

• Owner compensation normalization — your W-2 plus distributions will be recast to market comp (typically MGMA 50th-60th percentile for general derm, higher for Mohs).
• Real estate rent — if you own the building and charge below-market rent, buyers will adjust to fair market rent.
• Family member payroll — spouse or children on payroll at above-market rates get stripped out.
• One-time items — EMR conversions, legal settlements, PPP forgiveness income.
• Cosmetic revenue run-rate adjustments — if you've recently hired an injector or added a laser, buyers may give credit for a partial year of run-rate.

For more detail on what buyers will and won't accept, see our guide on adjusted EBITDA add-backs.

Advisor Selection and Process

Do not sell a derm practice without a healthcare-focused M&A advisor. The deal structures are too complex and the buyer universe too specialized for a generalist broker. Active derm-experienced advisors include Provident Healthcare Partners, Edgemont Partners, Cain Brothers (a Raymond James division), Physician Growth Partners, and Cross Keys Capital. Expect banker fees of 1.5-3% depending on deal size, with minimums around $300-500K for sub-$30M transactions.

A full derm practice sale typically runs 9-14 months from engagement to close. The long tail is driven by regulatory diligence, payer transitions, real estate, and the structuring of the MSO documents.

The Bottom Line

Dermatology is still one of the best specialties to sell from in 2026, but the economics depend entirely on how well you understand what you're signing up for. A physician who goes in expecting a clean check and a walkaway will be unpleasantly surprised. A physician who goes in understanding the MSO structure, the compensation reset, the retention commitment, and the equity rollover will recognize that this is one of the best wealth creation events available to a practicing dermatologist today — if you run a real process with a real advisor.