TUSK Practice Sales: Q3 2026 Dermatology Market Report Finds Private Equity Demand Remains Strong For Dermatology Practices

As broader healthcare deal activity pulled back, the dermatology industry continued to see steady add-on transactions with a maturing recapitalization wave and new state laws reshaping buyer demand.

Key Takeaways

• TUSK Practice Sales reports that dermatology M&A activity remained steady in the first half of 2026 compared with the 16% year over year decline in broader healthcare.
  
  
• Buyer demand is concentrated on quality, diversified practices. Well-run practices offering a mix of medical, surgical, and/or cosmetic services with $500K+ of EBITDA are drawing the most competition.
  
  
• A recapitalization wave is underway in the dermatology industry. At least 25 PE-backed dermatology platforms have been held five or more years, and will be pursuing recapitalization events in the near term putting fresh capital and more competing buyers into the market.
  
  
• New state laws, including Oregon's SB 951 and California's SB 351 with bills pending in nine more states, are steering buyers toward states with less red-tape on corporate practice ownership rules. 

CHARLOTTE, N.C., July 28, 2026 /PRNewswire/ -- TUSK Practice Sales ("TUSK"), the premier healthcare-focused M&A Advisor, today released its Q3 2026 Dermatology M&A Market Report. With private equity's sustained interest in dermatology, the report examines recent transaction activity at both the platform and add-on level, how dermatology practice valuations are holding up in today's economic environment, and what the remainder of 2026 holds for practice owners weighing a partnership.

Demand for dermatology care is not slowing down. The U.S. dermatological services market was roughly $63 billion in 2023 and is projected to reach about $128 billion by 2033, a 7.3% compound annual growth rate, driven by an aging population and nearly 9,500 skin cancer diagnoses recorded every day in the United States. Across dermatology, practices continue to expand their service lines to include medical, surgical, and cosmetic procedures to attract a broader patient base. Management Services Organizations (MSOs) and private equity groups look favorably on practices with diversified service offerings that are easily integrated. While the deal count for healthcare services fell 16% year over year to 79 reported deals in Q1 2026, according to PitchBook, dermatology was cited as one of the few subsegments where activity persisted.

"Dermatology practices held their value in a quarter when most physician-services sectors experienced a softening of multiples, indicating high demand from buyers for quality operational dermatology practices," said Ryan Mingus, Managing Director and Partner at TUSK Practice Sales. "What has changed for dermatology practices pursuing a sale is the leverage owners have in a volatile environment. With at least 25 platforms now five or more years into their hold, you have well-funded buyers who need to grow through acquisition competing over a much smaller pool of practices than in other healthcare specialties. For the dermatologist who has built a successful dermatology practice with $500K+ of EBITDA, that scarcity is real leverage."

The report identifies four forces shaping the market:

• Add-ons are the engine. The deal mix has shifted decisively from platform creation, which peaked in 2021 and 2022, to add-on acquisitions. Buyers now compete to fill existing platforms rather than build new ones.
  
  
• The recapitalization wave is here. At least 25 PE-backed dermatology platforms have been held five or more years, and several of the most active groups have already recapitalized or refinanced. Fresh capital means more funded buyers at the table and more optionality for dermatology practice owners on price, structure, and timing.
  
  
• Rates favor discipline. With the Federal Reserve holding a federal funds rate target range of 3.50% to 3.75% and signaling a possible hike, expensive debt is making buyers more selective and deal structure more important.
  
  
• Geography matters more than ever. A widening patchwork of state laws, including Oregon's SB 951 and California's SB 351, with bills pending in at least nine more states, is restricting how private equity can own or control healthcare practices. Buyers are hesitant to enter restrictive states, leaving owners in affected states with fewer bidders and less competitive tension.

For dermatologists seeking to better understand the mechanics of a practice sale, the report also provides a detailed review of the different components involved in offers: cash at close, escrow, post-sale compensation, joint-venture and sub-platform equity, earn-outs, and holding-company equity.

"Buyers still need quality practices, and the groups sitting on aged platforms cannot wait forever," Ryan Mingus added. "We expect acquisition activity to pick up through the back half of 2026 as recapitalized groups put fresh capital to work. Dermatology practice owners should be prepared to understand their practice's opportunity in today's market to make informed decisions."

The full Q3 2026 Dermatology M&A Market Report can be accessed here.

About TUSK Practice Sales

TUSK Practice Sales ("TUSK") provides M&A Advisory services in the healthcare industry. TUSK has completed over $1.5B of transactions across all specialties. With an in-depth understanding of the marketplace and access to 100's of buyers nationwide, we help our clients confidently pursue M&A transactions that maximize their long-term value. With our significant collective experience of over 125+ years of practice transactions, we offer our clients solutions that help them achieve their strategic and financial objectives. For more information, visit www.TuskPracticeSales.com. 

SOURCE TUSK Practice Sales