TUSK Practice Sales

Welcome to the Tusk Practice Sales podcast, the premier podcast featuring the industry’s most influential thought leaders, providing the latest insights and trends for healthcare practice owners across the globe.

Kevin Cumbus 00:20

This is Kevin Cumbus. Thank you for joining us today. I am so pleased to be joined with two of my favorite people, Brian Colao of Dykema. You know, Dykema is the largest, most successful, prolific law firm that exists in healthcare today, we have a 10-year relationship with them, and Brian is really the tip of the spear when it comes to that business. Oh, by the way, he’s more knowledgeable than anyone I’ve ever met about the space and has forgotten more than I probably will ever learn about it. So, Brian, first and foremost, thank you, thank you, thank you for joining us today to talk about what’s going on in the medical aesthetics space.

Brian Colao 00:56

Hey, Kevin. Happy New Year to you, obviously, and thank you for having me never gets old sitting down with you to talk about healthcare. So, looking forward to the discussion.

Kevin Cumbus 01:06

Awesome, and also with us today is director here at TUSK, Josh Swearingen. Josh is really our internal expert on all thing’s medical aesthetics. Josh has had a long career in dental and believe it or not, found his way into the medical aesthetics world as an investor, as an owner, as a builder, as a grower, and most recently sold his position inside of a med spa business. So, he has been where so many of you are today. Josh, thank you for joining us and imparting your wisdom with us today, man.

Josh Swearingen 01:22

Well, you know, you pick up some bumps and bruises along the way, but thrilled to be here, thrilled to talk about my experience and share with the rest of the world.

Kevin Cumbus 01:47

There’s plenty to talk about, but one thing that I want to just address head on is really talk about what’s going on. It like, where’s the money coming from? What’s happening here? You know, we get asked at TUSK, you guys are dental what are y’all doing here in medical aesthetics? Well, it’s really quite simple. You know, you look at the money behind these, the private equity companies behind them, Shore, Thurston, Lead Capital, Latticework, Leon, we’ve got Varsity, you’ve got, I mean, the list goes on and on, right? And what do these private equity groups have in common? They have dental platforms, and they also have medical aesthetic platforms, meaning they’ve got platforms in dermatology, plastic surgery, or pure play Med Spa. And the truth is, we got tapped for years from guys saying, would you please get involved in this space? Because it’s a soupy mess. There’s nobody doing it the way you guys do. And frankly, we need some professionalized help coming in here to help these incredible business owners really unlock the value of their business. So, we’ve been on this tear now for well over a year, and it has been so interesting learning from this from these business owners, what their challenges are, what their successes are, and the most importantly, what the value of these businesses are and what’s trading today. So, Josh, I guess I want to start with you get, give us the lay of the land, like, what’s going on from a valuation perspective today? Well, if I’m, if I’m, if I’m building my practice, and I’ve got a derm business, with a with a small medical esthetics business, some injectors in my practice, and I’m doing three to $5 million of revenue, what does my future look like?

Josh Swearingen 03:25

Sure, sure, I mean I think, I think the beauty of where we are in the space right now is that is that there is, there’s a lot of interest in the medical aesthetic space, from the buyers’ side, from private equity and other investors that are out there, and that that interest is spread across multiple investing environments. So, if you’re a single location, owner of a small private practice, and you run a good business, there is very likely a good, qualified buyer or a large number of qualified buyers that will be interested in your business. If you’re operating a large business with multiple sites and two, three, $4 million in EBITDA, there are private equity investors that are salivating to gain access to you as a prospective seller and partner with you and your growth moving forward. So, I think that, you know, we had a lot of a lot of people sitting on the sidelines throughout much of last year, even leading up into the election period. And since then, it hasn’t loosened up quite as much as we thought it would, but we’re starting to see, we’re starting to see some of the signs of of that capital coming into the marketplace and opening up some really, really nice selling environments for prospective sellers out there.

Kevin Cumbus 04:35

Brian, you guys see more deal flow than anybody in the nation. What? What is what? What’s the view from your vantage point?

Brian Colao 04:43

Yeah, I mean, it’s selective. It’s selective M&A. Now, you know, literally, and we’ve talked about this before, Kevin in different verticals, you know, right around, almost to the day, you know, end of June 2022, you know, inflation really started to. Tick up on in a not a good way, but breathtaking manner. In like two or three months, interest rates had tripled. So, you know, 2022, you know, third quarter, you know, a lot of the M&A activity, you know, really started to slow down in health care. I mean, it had been explosive. It had been record pace 2017, 18, 19, the last part of the 2020 after COVID, 21 was the mother of all records, because they thought that the capital gains rates were going to go up at the end of the year. So really, everybody wants to get their deal done. And then 22 looked like it was, you know, hanging in there pretty well, until the interest rates just sort of, you know, really went up, in a way they hadn’t gone up in 25 years, or something like that. So, it kind of slowed things down. You know, the med aesthetics field and the med spa industry is poised, I think, for a massive consolidation. I think this could be, you know, the year that everything just kind of, you know, the breaks through. Or, you know, it could be later this year, first of next year. But, you know, deals are getting done now. I mean, that’s the thing they are getting done now, but they’re select people are looking and making sure the fundamentals are there. Just because a business is making money, they’re not going to leap in and write a check right away without considerable diligence. And if everything sort of checks out with that business, and it seems like the growth trajectory is sustainable, and everything, you know, the EBITDA is the term seasoned like, it’s not like, like, it just showed up a flash in the pan. It’s actually, you know, sustainable. You know, there are deals to be had. There are people that want to buy them right now. And you can get, you know, once in a generation returns for this stuff now, with the right organization, there are other organizations, Kevin, that are going to need a lot of work. You know, I know TUSK has done a great job on this with other organizations over the years, but you’re going to have to prepare for a sale and do a number of things, and it might take, you know, three months, six months, a year, before that process, you know, is ready. And then there are other things that maybe aren’t Class A assets, but they’re not bad. They’re like Class B, Class B+. And maybe at the moment, you know, there’s not a whole bunch of buyers lined up, but in the next few months, when things loosen up, you know, those things are going to start to move, you know, too. So, I think we’re poised for really good things, but we still got this hangover of, you know, interest rates and inflation has not ticked down where everybody wants it. It’s got to be about 2% for the interest rates to start to come down. It was 2.6, now it’s 3. You know, it’s just hanging in there. So, a lot of optimism, a lot of optimism, and a lot of good things are on the horizon.

Kevin Cumbus 07:34

That feels like there’s, there’s been patience, right? Everybody’s kind of waiting, wait and see right now. And it feels like for the bigger trades, right? For the big deals where it’s kind of bet the company, bet your job, we’re talking north of $5 million of EBITDA, those deals have been sluggish. We have not seen a lot of activity at that level. Whereas, you know, sub $5 million of EBITDA, it’s not quite a tuck in, right? But it’s not a platform. But those are a little less risky and there’s room for improvement there when it comes to operations, so you can pay a reasonable multiple and really operate that multiple down through, good management.

Brian Colao 08:13

Yeah, a lot of people got caught. I mean, the good news is there’s so much money on the sidelines, and even new money on the sidelines that’s waiting to come in. But some of the older investors got caught, like, in the transition. Like, I don’t know, Kevin, if you’re a hockey fan or whatever, but if you ever see hockey, they get caught on a line change. You know that? Like, you know, sometimes a goal gets caught in the middle of a line change because they didn’t quite get on. Oh, wow, they were coming down, we were trying to change our line, and we got, you know, we got surprised a little, and a goal got caught. The line change here was the interest rates literally tripling. In June of 2022 there were several investors. I can’t even no one can, could have predicted the way that whole thing went down, so I don’t even know I could blame them, but they got caught in a line change. They were out there, and then the interest rates tripled, and it just, you know, it’s been a struggle for some of those organizations. So, you know, some of the new investors now, you know, they’re not blind to that. They saw that, and they’re like, hey, we want to get back in, but we don’t want to get caught in a line change. We want to make sure, you know, this is the right investment for us. So, everybody’s taking their time and doing a little more diligence than they would have or, in some case, a lot more diligence than they would have done in 2021, but you know, I think we’re going to get there. I think this is very exciting space, and we’re poised for some very big things to happen.

Josh Swearingen 09:34

I’d also piggyback off of that real briefly. I think, I think it’s interesting, because I think Brian hit the nail on the head a minute ago when he talked about seasoned EBITDA. I think that I think you’ve also got a lot of money sitting on the sidelines that would really like to enter the market in that $5M, and $6M and $7M EBITDA range with a good platform. But if it’s a business that is south of that $2M, $2.5M, $3M, $4M in EBITDA, and it has good, seasoned EBITDA, good infrastructure, kind of a scaled management system, they are willing, willing to dip down into that space and create a platform off of that and then scale it from there. So I think, I think you’re seeing some of those concessions on size being made because there, there aren’t a lot of businesses out there, and I think there’s almost a fear of missing out by some of the some of the funding sources that that they’re going to miss out on the opportunity for the upswing, when, when everything loosens up.

Kevin Cumbus 10:26

Josh, are you seeing new buyers enter the market? I mean, Brian mentioned this, that we have some businesses that are kind of acting like zombies, right? They can’t grow. They they’ve got to just kind of sit there. Lenders aren’t, aren’t giving them additional capital for growth. Adam Smith’s Invisible Hand is a pretty miraculous thing, and capitalism is just as you know, we all love it and adore it. So, where there’s that gap, there’s got to be a solution coming in. What are you seeing from the buy side right now?

Josh Swearingen 10:53

Yeah, I mean, I think, I think it’s a little bit of both. I think that you do have a lot of new buyers coming to the plate. But as Brian just mentioned, I think they’re coming in a little bit more educated, with a better view of what’s happened over the last 12, 18, to 24 months. So, they’re coming in with a lot more diligence and a higher bar to hit, I think especially on the infrastructure and performance of the business itself. I do think that there were a lot of buyers out there that were buying for a long time based on 2020 and 2021 and early 2022 valuation metrics. And to Brian’s point, they got caught kind of with their pants down. So, they, they’ve had to step back and lick their wounds a little bit and just weather the storm. So, there isn’t a lot of capital being deployed by some of these legacy organizations who are really just trying to recoup what they didn’t plan for in that initial interest rate environment. So, it’s leveled the playing field a little bit. It’s allowed a lot, allowed a lot of additional entrance into the market. And I think that a lot of the groups that are being built now, in many ways, are probably higher functioning and better businesses than the ones that were formed earlier on.

Brian Colao 12:02

You know, Kevin, the age of everybody that’s watching this probably bought a car sometime in their life, right? So, the age of Kelly Blue Book is over with where you had, like, the book like, hey, you know, I’ve got 30,000 miles, you know, on this car, and it’s a 2022. Well okay, let’s go to the book and you read, okay, your trade-in value is this, for a while healthcare was like that. I mean, particularly, you know, one of the bigger verticals of the last several years, dentistry that’s been on, you know, an explosive consolidation, you know, if this was the year 2017, 18, 19, last quarter of 2021, we just looked at, you know, what’s the Kelly Blue Book say, you know, you got 10 offices, $3 million in EBITDA. Okay, you’re going to get this. This is what you’re going to get, uh, after the whole transition of 2022 with the interest rates, everything is very organizational specific. Things may look the same on paper. You may have two organizations that look at least financially identical on paper. But when somebody conducts diligence like the culture, like the skills of that operator, you know, drill down and see the quality of the employees, they may say, one of these, we’re going to give a premium to the other one. We’re not interested in buying it at all, even though it looks very similar on paper. So, you know, these things have now become very organizational specific. You can’t just, you know, say, you know, how many offices do you have? What’s your EBITDA, okay, this is what you’re going to get. It’s a lot more, you know, organization specific. Now into, you know, Josh’s point, maybe it should be, I mean, maybe that’s the type of diligent if you take that time and, you know, one, if you’re a seller, you do your homework, you put in the work you do the things you need to do to make your business more valuable. And the buyer then starts to inquire and starts to conduct diligence and investigate, and they see that you’ve done these things, then you know you’ve got a solid trade. You’ve got the makings of a very, very solid deal there.

Kevin Cumbus 13:58

Yeah, one of the things we see so frequently in these businesses, Brian is that key man risk. And the key man risk can live with the injector, it can live with the surgeon, it can live with the dermatologist. And in those pieces of the puzzle have to be locked down legally to get paid full value for it. How are you and Dykema addressing those issues right now with folks that are building and growing these businesses?

Brian Colao 14:22

Yeah, I mean, you know, you a lot of it depends on the states that you’re in. Some states will let you lock down things better than other states. I mean, it was a big relief for that whole, you know, FTC non-compete thing. That thing’s now gone, so we don’t have to worry about that too much anymore. But you know, you have to look on a state specific basis. But one thing that I think might be a bit different about, you know, med spa space that you know, we see in other verticals. So, you know, in the dentistry is our best-case study, just because dentistry has exploded over the last 10 years. So, we keep, you know, using that as a case study. But the interesting thing about dentistry was people are not attached to their dentist. I mean, a few people are, but most people are attached to do they take my insurance? Is it close to my house? And can I make an appointment timely, you know? And if all those things fall into place, you know, if you change out the dentist, I mean, it is what it is, I you know, what does he do? He or she comes in, tells a little joke and leaves like, I’m really not worried about that. These type of things like med spa, I’ve certainly seen it with plastic surgery. I’ve seen it in other things, like, you know, orthopedic surgery, you know, you got to get your knee done. There’s a very personal connection that’s made with that surgeon, or in this case, the esthetician or the injector, you know, not, some people are like, I’m not going to let anybody inject in me, you know. I know you know Mary Jane down there, and she’s been doing it for years, and I trust her, but you want to stick somebody else in there? Yeah, I’m not so sure. I’m going to come back, or I’ll follow Mary Jane wherever she went, you know. So, you have to be mindful of that. It’s not as fungible as in, say, dentistry or some other verticals where, you know, people like X-ray technician, oh, my X-ray technician left. No one’s going to, no one’s going to care about that. You know, this guy’s doing an MRI. No, I liked it when Robert did the MRI, not. Now, you’re not going to have that, you know, that problem, but in this space, you will, because it comes down to how people look, you know, aesthetics and you know, they’re very particular about who they’re going to let you know, do you know certain things to their inject things or facial or give treatments and things, so you have to be mindful. So, to your point, you do have to lock this stuff down. It’s really, really important. Some states allow you to do it more than others, but you know, it’s some combination of golden handcuffs of making sure they’re properly compensated. Nobody wants to buy an organization where people are under compensated and at flight risk, even if it means the even is lower. You got to have, you know, legitimate market pay. I mean, that’s the first defense. You know, you can pay these people in accordance with the market. They’re probably not going to take off. Two, you want to have protections such as non-competes, non-solicitations, you know, non-disclosure of confidential information. Again, different states will let you do different things. And then finally, you got to consider, in some instances, giving folks skin in the game. Give them shares, you know, either in the actual clinic, if they can, some states allow that, others, it has to be through an MSO arrangement, but you give them an ownership interest, and that creates a certain stickiness to everything. So, people are not inclined, in my example, Mary Jane doesn’t want to run across the street. She has no incentive to take off and leave because she feels like she’s paid well, maybe she’s an owner of the business. She’s also legally tied up all of those things, you know, but in my experience, some of the organizations out there that we’re all going to work with haven’t been able to pay attention to this. And it’s understandable. You’re growing your business from the ground up. This isn’t priority one for you, and now you’re at the point where, look, this business has a lot of value and you want to maybe monetize it, you really have to have this stuff buttoned up, because if it’s not, you know, you’ll either be undervalued, or people may not be willing to make an investment unless this gets buttoned up.

Kevin Cumbus 18:11

Josh, I’m curious that you know the buyers are trained to look for risk. Right? Valuation is a function of risk and cash flow, risk and EBITDA, so when you’re when you’re talking with the buyers, what, what are they focused on these days, from a risk perspective across the waterfront of these medical aesthetic practices?

Josh Swearingen 18:28

I mean, I think, I think there are a couple of different things, and to some extent it varies based on the vertical you’re focusing on, the risks they’re looking at in dermatology and plastic surgery are a little bit different than what they look for in the med spa space, looking at the med spa space first, you know, I think, I think one of the things that that they are the most concerned about is just the sheer onslaught of businesses that have been opened over the last three to four years, growing the industry the way that it has, and how many of those businesses are actually built on the proper business principles and can survive and last so I think there, I think there is, there’s an almost wait and see mentality with a lot of the buyers in the med spa space, because there are so many new, young businesses, and there are businesses opening all day, every day, left and right. I think I regularly have conversations with buyers about some of the assets that are available, that the businesses that are available, potentially for sale in the market and a lot of them don’t really have a whole lot of value, because they haven’t been around long enough to build that value. So, I think that’s one of the risks. I think you guys just touched on the risk, which is the provider risk, and that on the med spa side, there’s obviously a regulatory risk. And I think Brian could probably speak to this a lot better than I could, but the regulatory environment in the med spa space is the wild wild west, and it is different in every single state you go to. And I think that a lot of these organizations, a lot of these aggregators, who are building out organizations that are eventually going to be multi-state, and. And cover a large geography, are having a hard time wrestling with what that’s going to look like in the face of what is almost certainly going to be some sort of regulatory change over the next, you know, three to five to seven years. So, like, those are kind of the bigger ones, especially in the med spa, about space that you run into.

Brian Colao 20:19

Yeah, I mean, Kevin, like, right from the start, you know, the business structure, some states will let non-physicians or non-nurse practitioners own these things outright. And, you know they do. I think there’s 16 or 17. You know, we have a grid here at Dykema where we keep our regulatory team keeps close track of it, but I think I’m remembering at least good enough for this time, I think there’s 16/17, states will let you, you know, flat out, own it. The rest of them, you’ve got to have some type of, you know, management service organization structure in place with a friendly, you know, physician or nurse practitioner or somebody that owns it, and then management agreements on top of it. That’s the first thing. The second thing is the scope of license, and that’s where the wild west comes in, really, because, to Josh’s point, we could tell you what the law is as to who can own it and what the structure is. I mean, that’s not I mean, there are people that are not compliant, you know, and we see them all day long, and we have to fix it. But I wouldn’t, you know necessarily say that that’s quite the wild west in as much as we know the answer like, everybody might not be doing the right thing, but we know what the answer is. Where it gets to be the wild west, where, like Josh is absolutely right, is the scope of license issues. Who can inject, who can’t inject, who can do certain procedures? And there’s a huge gray area you could drive a caravan or a convoy of trucks through the gray area of you know, is it really allowed? Is it not? And it becomes quite difficult. And, you know, especially from state to state, right? There are some folks I know that, you know, maybe they have a business in California, and then they’ve got one, you know, next door in Nevada or, you know, Oregon or something, and they’re like, you know, they’re like, oh, yeah, I went to a conference. They’re doing this in California. So, we can do it, not necessarily, it comes down to your license in your individual state. So, if you go to, like, a med spa conference, and, you know, you met somebody that seems quite knowledgeable, and they’re telling you what they’re doing, but they’re not in your state, you know, you may not be able to do the same thing they’re doing. So, in addition to, you know, wrestling, Kevin, with sort of the business structure, who can own what, and how we’re going to set it up, then we have to wrestle with what procedures are we going to offer there, and who’s allowed to do them, and that’s different from state to state. So, yeah, I mean, you really so how this all comes down to, like, doing a transaction or something, if you’ve been doing this incorrectly, and somebody comes to buy you, they’re going to say, well, look, we’re not going to take on that risk. What if, you know, the regulators come down and suddenly discover, you know, we buy you, and then they discover, for the last five years, you’ve been doing this stuff wrong, and, you know, somehow they do a look back and try to give a fine or a penalty or something, you know, based on what you’ve been doing for the last five years. So it’s really important, in advance of any sort of sale, to make sure you’ve buttoned all this stuff up, to make sure you are in the right legally compliant structure for who can own it and how you’re set up, that’s number one, and number two, the things that you’re doing, the people that are doing them. It’s within the scope of their license, and they’re allowed to do it, because if that’s not the case, then you know, you’re going to have a lot of risk, and it may be a deterrent for somebody to buy your organization, or it may decrease the value. So, these are the things I know. If somebody calls, you know, Josh or TUSK up now, you know you’ll be able to button that, and certainly if they call me, we’ll be able to fix those things sort of in advance, so they don’t get I’ve seen this, and it’s just, it’s always breaks my heart, right? Somebody built this thing from the ground up. They start to get into discussions with a buyer. A buyer is interested, a buyer issues a non-binding Letter of Intent with a giant number, and they’re so excited about that number. And then, as we all know, we go to diligence then, and they start investigating this, and they find out, well, look, we would have paid that number, but now that we’ve learned that you’re illegally set up, or we’ve learned that, you know, your injectors are doing things that they’re technically not allowed do, or somebody else is doing something they’re not allowed to do, either we got to walk away, or, you know, you thought we were going to pay you 100 bucks. Now we’re paying 62 you know, it’s always heartbreaking when something like that happens.

Kevin Cumbus 24:27

This is why you have to work with experts in the field that understand these things, know where the risks live, know where the ticking time bombs can live, know where the skeletons live in the closet because you don’t want to get to that point. It’s too hard. It’s too emotionally draining to get to get down the line. You know, when I hear you two talk, what I hear first of all, table stakes is get your regulatory compliant MSO structure up and running. Assure, you know, roles and responsibilities, and you have a legal conduit through which to pay everybody that’s connected to this organization to do your best to reward, incent and align your caregivers, either through equity and specifically through employment agreements and non-competes, and then to the best of your ability, avoid and mitigate key man risk through multiple providers. And the tricky thing here is, like you said, Brian, I mean, you know that people get attached to their plastic surgeon and their dermatologist and their injector so is and as much as a social media presence as they have, and they want to, really want to draw more patients to them, the most valuable business you can build is a business where you can actually replace yourself. And that’s so counterintuitive to this world, and I think we’re going to get there through multiple evolutions of people being told, hey, doc, I love your business you’re the best plastic surgeon we’ve ever seen in Las Vegas. You’re doing $4 million by yourself, but you ARE the business. And I know you’re going to sign a five-year post sale employment agreement, but when you’re gone, people quit flying in from Europe to come see whoever’s next, and that that’s really the that’s one of these bigger issues that we’re going to have to tackle and find great conduits to solve for that risk. Josh, before we go, I want to know where, where is the white hot? Is there a white-hot area the market? Is there an area that’s trading where buyers are more prevalent. If you were building a business today, what type of business would you build to maximize value?

Josh Swearingen 26:28

Sure well, you just hit on, you just hit on a couple things, and that is provider diversification. And I think a lot of the businesses across any of the three verticals we’ve discussed being med spa, derm, and plastics, they have there are good, qualified buyers in each that if you have a really good business built and a diversified provider base, you’ll draw a really nice multiple and a good valuation. I think as far as the white hot that you’re talking about, I think if you look at if you break it down into those three buckets, dermatology, plastic surgery and med spa, dermatology is the most mature of the three. So there, there are a large number of groups that are out in the space. There are a large number of national aggregators and buyers that are out in the space. So, I think that you do there is a good kind of froth around deals that go to market, because you’ve got a really good competitive environment to go into market within. Plastic surgery, although not quite where dermatology is, and also a little bit more mature marketplace, with more buyer options out in the space. And I think that you can get a really nice valuation in the plastic surgery space. Again, the caveat to that is, the higher valuations you’re looking for are really dependent upon how well you’ve diversified the revenue streams within the business. And I think one of the interesting things about how the space has evolved over the last two to three years, is the buyers are actually pointing the way on that front, a lot of these national groups started as pure play, med spa, pure play dermatology, pure play plastics groups, and they’re already starting to kind of gray the lines. So, you’re seeing dermatology groups that are also incorporating med spa into that, and they’re trying to bring med spas, you know, strategically, bring med spas into their group to help diversify some of that provider risk that they have. Same thing with plastic surgery. You’re seeing medical plastic surgery, bring in medical derm, and start diversifying some of those procedural mixes and things like that. So, I think if you can kind of distill that down into your own personal business and understand that it’s not just a doctor, it’s a doctor and a nurse practitioner and a PA and an esthetician that are all driving revenue, and its retail product coming out the front door. I mean, all of these things play into it. So, it’s a long way to answer your question. I think, I think dermatology is very, very mature. It’s in a great spot. I think plastic surgery is starting to get there. And I think med spa is certainly the least consolidated of the group has a little ways to go. And I think some of that is, it’s just, it’s a very, it’s not a mature industry as of yet, and we’ll get there at some point in the next couple of years.

Kevin Cumbus 29:01

Awesome, great takeaways. Josh, thanks, man. Brian. Want to leave the last word with you. Where are we going here? Where, what does this look like three years from now?

Brian Colao 29:11

Well, we’re going to a massive consolidation eventually. You know, I’ve heard it’s about 4% consolidated, you know, in the in the med aesthetic space. So, there’s a lot of runway to go. And I think, you know, we’re definitely going to go to 10, 15, 20, 25%, 30% consolidation. It may take 5,6,7, years, you know, to get there. And I would, you know, I would rather it take a little longer to get there and have it be built on a solid foundation than people just, you know, running out and buying things and then encountering challenges or difficulties with what they bought. So, I think it’s exciting. I mean, where we’re going is to a very exciting time, Kevin, I think people, you know, this isn’t just a case of, hey, I’ve built a med aesthetics business, and, you know, that’s it. For me, you know, I’m just kind of here running it. I think there are opportunities for people to monetize that, for people to partner with, you know, PE groups and others, to grow it further, for these staff members to actually advance in an organization. I was like a really, really good injector in this practice. This practice is now affiliated with this larger organization, and there’s 50 offices, so now I’m training people in this region. I’ve got 10 offices where I’m responsible for going and training people. And I did get a big raise, and now I’m a manager, and if I do a really good job, I’ll be some type of you know, now, instead of a regional I’ll be a national manager or something. So, there’s incredible opportunities for everybody, not just for the founder of the business that’s going to sell it, but for all of the employees there. So, it’s a really exciting time. It’s just going to take a little while, Kevin, you know, with the challenging conditions we’re experiencing, for all that to work out. But I mean, you know, it’s short term and long term really a lot of optimism and excitement.

Kevin Cumbus 31:01

It feels like they’re more thoughtfully built, hopefully more purposefully built, and, you know, more regulatory compliant as well. At the end of the day, private equity wants to invest in businesses that are working, not the ones that are broken. They want to work with businesses that have great cultural alignment, alignment across all the providers. And you know, this, this little time, this little break in time of on the M&A side, it’s just the perfect time to really, you know, let’s say, clean house a little bit, straighten everything up, make sure everything’s running as smooth as the top. So, when the market does re-materialize, and it becomes that seller’s market again, you can be the most prized asset out there. Hey, Brian, let everybody know how they can get a hold of you if they if they want to have you take a look at their structure and learn more about what, what you and your team can do for them.

Brian Colao 31:51

Yeah, I mean, if you go to Dykemadso.com you know, we’re actually creating a website now for med aesthetics, because it’s exploding. But you know, we’ve been in dental, you know, forever doing these deals. We do a lot of med spa deals, but I haven’t created a separate website for that, but right now it’s Dykemadso.com and you can get my information and my team’s information and reach out if you have any questions, even if you just want to talk, you’re not ready to do something now, but you’re curious about the market. I love meeting people and chatting about this space.

Kevin Cumbus 32:22

Awesome. And Josh, what about you? How can they get a hold of you, and where are you going to be in the next couple of weeks and months on the road?

Josh Swearingen 32:27

The next meeting I’m at is that is the Mac meeting in Hilton Head Island, which is a multi-specialty meeting, which will be a great meeting, and actually a great location as well. You can just reach out [email protected], happy to have a conversation with anybody at any point in time.

Kevin Cumbus 32:43

Gentlemen, thank you for your time. We will do this again. Check it in six months and see where we stand.

Brian Colao 32:49

Thanks, Kevin.

Josh Swearingen 32:50

Thanks guys.

Kevin Cumbus 32:51

Thanks everybody. Man, that was so good. I always love getting Brian Colao’s perspective on the market, and to have Josh, who’s like the seasoned expert, who’s an operator in the space, who’s built, grew, scale, and exited his position, who’s on the front lines of these businesses, and really hearing from them, who are Brian, who’s closing deals and trying to get deals closed, and then from Josh, who’s talked to the buyers and really get a flavor for what they’re looking for. Now, two the biggest takeaways for me are this. Number one, all the buyers are different, and you really need someone on your side who not just understands what they’re looking for, but what the value their equity is likely going to be. To hear Brian talk about some of these, these businesses just going dormant, you know, makes me wonder about the likelihood of that equity role ever, ever turning into cash. And then two, you know, it feels like it could be a little bit early innings for the smaller businesses, but for businesses doing a million plus of EBITDA, yeah, there are a lot of buyers out there, tons of buyers out there, be it plastic surgery, dermatology or med spas, you’ve built businesses that live as a pretty rare air, and you deserve to be represented by somebody who’s as passionate about your industry as we are. So, listen, I really feel like we just scratched the surface on this podcast. So, what we’re doing is we’re actually building a whole program around this this this summer, July 17th through 18th. Here in Charlotte, we’re going to host the practice owner, MBA. We’re going to have some of the best and brightest minds on stage interacting with you. We’ll do a cocktail party the night before and then do a full day of education on that on the 18th there’s details on our website, at TuskPracticeSales.com. If you want to learn more about it, you can hit us up over email at [email protected] or if you’re old school like me, just be able to pick up the phone and talk to somebody. Feel free to do it. You can reach us at 704-302-1043. Thanks again to Josh and Brian. You guys are the best I know. We’ll have you back soon. Hope everybody else has a wonderful day. Take care and thanks for joining.