$1.6M
$628K
4.0x
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Very Confidential. Full-service Dermatology Practice is established for over 30 years in South Florida. Spacious offices allow for multiple providers if desired. Currently it's the Seller plus one additional Derm and staff of seven. Seller wishes to execute on a succession plan. Seller will remain for extended transition under mutually agreeable terms. Interested parties will need to be either licensed Florida Dermatologist or an entity which is currently operating in the Dermatology space. Full Offering Memorandum is available for those who qualify. Please contact Tom Jones for additional information. The listing number is 0101-782426.
Why we like it
- Earnings Quality is strong with 40% cash flow margins on $1.57M revenue, typical of established dermatology practices where procedures command premium pricing. The 3.98x multiple is reasonable for a medical practice with this level of profitability, and the recurring nature of dermatological care creates predictable cash flows from an established patient base built over 30 years.
- Durability comes from the high-barrier nature of dermatology requiring specialized licensing and lengthy training, creating natural moats against competition. The practice has weathered three decades including multiple economic cycles, and dermatology is among the stickiest medical specialties with patients rarely switching providers once established relationships are formed.
- Market Tailwinds are exceptional in South Florida with rapid population growth and an aging demographic that requires increasing dermatological care. Skin cancer rates continue rising, cosmetic dermatology demand is growing, and the supply of dermatologists remains constrained by residency bottlenecks, creating pricing power for established practices.
- Operator Advantage exists for qualified buyers who can immediately step into an established practice with existing patient relationships, staff systems, and referral networks already in place. The multi-provider setup and spacious facility provide immediate expansion opportunities without the typical 2-3 year ramp time required to build a practice from scratch.
How to improve it
- Implement comprehensive revenue cycle management by auditing current billing practices, insurance reimbursement rates, and collection procedures to identify missed revenue opportunities. Many established practices leave money on the table through outdated billing codes, incomplete documentation, or poor follow-up on unpaid claims that could add 10-15% to collections.
- Expand cosmetic dermatology services which typically command 3-5x higher margins than medical procedures and are cash-pay rather than insurance dependent. The established patient base provides immediate cross-sell opportunities for Botox, fillers, laser treatments, and aesthetic procedures that could significantly boost profitability.
- Optimize provider utilization by analyzing current scheduling patterns and patient flow to determine if the second dermatologist and support staff are being fully utilized. The spacious facility suggests capacity for additional providers or extended hours that could increase revenue per square foot without proportional cost increases.
- Develop systematic patient retention and recall programs including automated appointment reminders, follow-up care protocols, and preventive screening schedules. Dermatology practices benefit enormously from proactive patient management that increases visit frequency and catches issues early when treatment is more profitable.
- Negotiate improved payor contracts by leveraging the practice's 30-year history and patient volume to secure better reimbursement rates with major insurance carriers. Established practices often accept outdated contract terms that can be improved through professional negotiation, potentially adding significant bottom-line value.
Diligence notes
- Verify payor mix and reimbursement trends by analyzing the percentage of Medicare, commercial insurance, and cash-pay patients along with historical reimbursement rate changes. Dermatology practices with heavy Medicare exposure face ongoing reimbursement pressure, while those with strong commercial payor mix maintain better margins and growth prospects.
- Examine patient retention metrics and referral patterns by requesting data on patient visit frequency, new patient acquisition rates, and referral source analysis. A practice this established should show strong patient loyalty and steady referral relationships that indicate the goodwill value will transfer to new ownership.
- Review staffing costs and employment agreements to understand if the seven-person staff is optimally structured and whether key employees have retention agreements. High staff turnover during ownership transitions can significantly impact patient satisfaction and practice operations in the critical first year.
- Assess facility lease terms, equipment condition, and technology systems to identify any required capital expenditures post-acquisition. Medical practices often defer equipment upgrades and IT investments, and outdated systems can impact both operational efficiency and the ability to attract younger patients who expect modern care experiences.