Medical Spa Acquisition via Asset Purchase
This transaction involved the acquisition of a well-established medical spa located in a mid-size urban market in the western United States. The business, founded six years prior by two medical professionals one of whom maintained active licensure and operational control offered high-margin aesthetic treatments including Botox, fillers, laser resurfacing, body contouring, PRP therapy, IV hydration, and hormone therapy. The business generated $2.85 million in annual revenue with adjusted EBITDA of $610,000 and had built a strong patient base through referral marketing, physician partnerships, and a membership-based loyalty program. The transaction was structured as a partial acquisition with a tiered buyout of the remaining equity, SBA 7(a) financing, and a five-year employment and revenue participation agreement with one of the founding partners.
The buyer was a seasoned operator in the health and wellness sector who had previously exited a chain of wellness clinics and was seeking a high-cash-flow, physician-led brand to use as a regional platform. After an extensive search, the buyer identified this medical spa as ideal due to its treatment diversity, licensed providers in place, and reputation for clinical excellence. Notably, the business operated with six full-time staff, including three nurse injectors, one physician assistant, two aestheticians, a clinic manager, and three part-time support roles. The founding physician, who also owned 60% of the business, was seeking to step back from daily management but wanted to remain involved in training, branding, and regulatory oversight. The other co-founder, a non-clinical partner, owned 40% and planned a full exit.
The structure of the transaction allowed the buyer to purchase the 40% non-clinical partner’s interest immediately via a standard SBA 7(a) acquisition loan, structured as an asset purchase. The licensed physician partner rolled over 25% of their equity into the new entity and entered into a tiered buyout agreement whereby the remaining 35% interest would be acquired by the buyer over a five-year period, contingent upon maintaining defined EBITDA targets. The initial transaction price was set at $1.35 million, representing approximately 5.3x trailing adjusted EBITDA, with $540,000 allocated to the 40% partner’s interest and the remainder to working capital, equipment value, and goodwill associated with the ongoing relationship with the physician-founder.
The SBA loan covered 75% of the upfront capital, with 10% cash injection by the buyer and 15% covered via seller financing on a standby basis. The note carried 6% interest over 5 years, with payments beginning in month 13 post-close. The employment agreement with the retained physician co-founder included a base salary of $180,000 per year, quarterly performance bonuses tied to clinic revenue, and a deferred buyout schedule whereby the buyer would acquire 7% of the remaining interest each year for five years at a fixed valuation multiple of 5x adjusted earnings, using the average of trailing six quarters. This ensured alignment and performance accountability, while locking in a clear path to 100% ownership for the buyer.
The spa operated out of a leased 3,800 square foot facility in a Class B retail building with good visibility, signage, and ample parking. The lease had three years remaining with two five-year renewal options and rent of $7,200 per month NNN. The facility included five treatment rooms, a private consultation room, reception area, staff lounge, and medical prep space. All FF&E was included in the sale, including a Sciton laser suite, CoolSculpting machines, hydrofacial station, dermal imaging equipment, and electronic medical record (EMR) system (Aesthetic Record). The buyer performed a full FF&E audit prior to close and verified that all assets were in good working condition, with service contracts in place on all Class II medical devices.
Patient records showed over 7,500 active patients with repeat visits averaging 2.4 per year per client. Over 38% of patients were enrolled in a subscription-based loyalty program providing monthly treatments and discounts on injectables and skincare products. These recurring revenue streams accounted for approximately 22% of annual income and were billed via Stripe with automated invoicing. The business also generated retail product sales comprising 14% of total revenue, with a gross margin of 62% on private-label skincare, nutraceuticals, and topical anesthetics.
Marketing efforts prior to acquisition had focused on physician referrals, Instagram content, influencer partnerships, and an email list of 11,000 local subscribers. The buyer introduced a new CRM and automation suite (PatientPop), integrated with Aesthetic Record, to streamline online booking, post-visit follow-ups, and referral tracking. Within 90 days of closing, the buyer initiated a rebrand with updated signage, new website, Google Ads, and SEO optimization, resulting in a 27% increase in new patient bookings and a 9.3% increase in average ticket size due to increased package conversions at point-of-sale.
The buyer maintained all staff post-close and introduced a tiered commission structure for injectors and aestheticians tied to revenue per available hour (RPAH), patient retention rate, and online review generation. Employee satisfaction improved, and turnover dropped to zero within the first six months. Training protocols were formalized, and the retained physician co-founder led monthly clinical workshops, improving standardization and compliance with state medical board requirements. The spa expanded its treatment menu to include semaglutide-based weight loss protocols, plasma-rich therapies, and RF micro needling all of which were high-margin, physician-supervised services that increased cash flow without requiring additional floor space.
Within the first year post-acquisition, the business grew revenue to $3.4 million and adjusted EBITDA to $745,000, exceeding projections and triggering the first deferred equity purchase from the retained co-founder. The buyer acquired 7% of the remaining 35% interest at a pre-agreed valuation based on 5x trailing six-quarter average EBITDA, paid in cash with no financing. This process repeated annually, creating predictable capital requirements and allowing the seller to monetize their equity gradually while remaining professionally engaged.
Regulatory compliance was a top concern given the medical nature of the spa. The buyer engaged legal counsel to verify all SOPs, delegation protocols, standing orders, and scope-of-practice documentation. Nurse injectors operated under direct supervision with standing orders issued by the physician co-founder. Consent forms, HIPAA compliance, controlled substance storage, and adverse event protocols were reviewed and brought up to date. An audit conducted by a third-party compliance firm six months post-close found no material deficiencies.
The buyer’s long-term plan involved converting the location into the flagship of a regional chain and expanding via de novo buildouts and future acquisitions. By implementing centralized scheduling, supply chain management, KPI dashboards, and brand standards, the buyer aimed to replicate the clinic’s high retention and profitability across a broader footprint. The deal structure with initial majority control and phased buyout—gave the buyer immediate operating authority and cash flow benefits while preserving clinical leadership, cultural continuity, and a risk-aligned payment structure for the seller.
The acquisition was ultimately a successful case study in how to balance the complexities of a medical-service business, with its clinical staffing and regulatory obligations, against the performance-driven demands of private equity-style ownership. The use of a phased equity purchase agreement ensured alignment, minimized the need for high-leverage financing, and allowed the buyer to grow into full ownership with minimal friction and strong collaborative performance.
