Types of MSO Deal Structures

Unpacking The Most Common MSO Deal Structures for Aesthetics & Wellness Practices

There is far more to selling your aesthetics or wellness practice than just signing on the dotted line. Before committing to a sale, it’s crucial to explore alternatives beyond a full buyout. 

With the influx of Medical Support Organizations’ (MSOs) interest in the aesthetics and wellness space, the landscape of deal structures has evolved – giving practice owners more control and value in their transactions. Here’s a breakdown of key models to consider when selling your aesthetics or wellness practice, ensuring you make the best decision for your future.

100% Sale 

The traditional model involves selling 100% of your practice to a buyer. This route is ideal if you’re ready to transition into retirement or if you prefer to solely focus on clinical care without managing business operations. After the sale, your role could either continue in patient care or conclude entirely depending on your preference.

Joint Venture (JV) Model 

In this model, you sell a significant portion of your practice (typically 60% to 90%) but retain some equity, allowing you to stay involved both financially and operationally. You’ll benefit from upfront capital while still holding onto 10% to 40% of ownership. 

This creates an opportunity for growth as you and the MSO both inject capital into the practice with your continued day-to-day involvement guiding the business’s direction.

Equity Roll 

This model is similar to a JV model, and involves selling 100% of your practice but retaining some equity in the larger organization that purchases it by rolling cash from the transaction into the MSO. 

The equity roll allows you to keep an interest in the business, participating in future growth and financial returns as the group expands even after relinquishing control of the practice.

Sub-MSO Model 

The sub-MSO model blends elements of a joint venture and an equity roll. You’ll receive a significant upfront payment and retain a portion of equity in a portfolio of practices, or the holding company. 

The structure enables you to benefit from profit sharing, equity returns and potential future buyouts without holding equity at the practice level, giving you the flexibility to expand further.

Direct Investment with Private Equity

If your practice is robust, you might bypass group buyers entirely and engage with private equity directly. These deals can vary — some may result in the investor taking a majority stake, while others are structured as minority growth investments. 

In both cases, you maintain a level of influence over the business while benefiting from growth and the expertise of professional investors. This option may also set you up as a founding member of a larger network should you choose to expand further.

What’s Next? 

There’s no one-size-fits-all solution for selling your aesthetics or wellness practice. Understanding the nuances of each deal structure can help you unlock the best value and future potential for your business. 

Reach out to our experts at LuxMed Practice Transitions to explore which option aligns best with your goals.