VSS taps growing cosmetic surgery demand with Olympus Cosmetic Group investment

The growing market for plastic surgery and other non-surgical beautification processes, coupled with the high fragmentation of the sector, attracted VSS Capital to make a growth equity investment in Olympus Cosmetic Group, Brad Corbin, principal at the New York headquartered PE firm told PE Hub. The deal was announced earlier in June.

Based in Jacksonville, Florida, Olympus is a newly formed platform that focuses on providing cosmetic surgery, dermatological treatments and non-surgical cosmetic procedures. Services include face lifts, abdominoplasty, breast augmentation, breast lift, liposuction, injectables, non-surgical aesthetic treatments and body contourings.

Olympus is led by physician co-founders who have various expertise in this space. They are Dr Erik Nuveen of Cosmetic Surgery Affiliates; Dr Alberico Sessa of Sarasota Surgical Arts; and Dr James Koehler of Eastern Shore Cosmetic Surgery.

Between 2017 and 2022, the US plastic surgery market is estimated to have grown 7 percent per year on average. “There is a large and growing market for plastic surgery in the US that’s been estimated to total approximately $26.6 billion in 2022,” said Corbin.

“This is also a highly fragmented sector, and about three quarters of the practices in the US are staffed by solo practitioners. It is still very early in terms of consolidation within the industry, and we see an opportunity to position Olympus as the acquirer of choice,” he added.

There is also growth in terms of non-surgical aesthetic procedures, including Botox, fillers and injectables.

The businesslike mindset of the three founding physicians and their “desire to be an acquirer of choice” is among the factors that attracted VSS to this platform, Corbin said.

For the growth of the surgical and non-surgical procedures, Corbin believes it is powered by the “greater public awareness and acceptance of these types of services.”

VSS is targeting both organic and M&A for growth.

“On the organic side, we believe there is an opportunity to add additional providers at the existing practice locations and continue to scale the new Jacksonville, Florida practice location,” said Corbin. “There is also an opportunity to continue to scale the non-surgical aesthetic business at each of the practice locations.”

For acquisitions, the platform will target “high quality” practices in favorable geographic markets to increase Olympus’ footprint. The platform has four facilities at the moment, including in Oklahoma and Alabama. VSS would also want to acquire practices that had an interest in rolling over a portion of their proceeds to the larger platform, Corbin added.

Among its strengths, VSS is banking on its previous experience in partnering with growing physician practices and building regional and national healthcare delivery networks with administrative support services.

In its portfolio, VSS has Center for Rheumatology, a Los Angeles-based provider of Rheumatology services; Pacesetter Health, a St Louis-based provider of Podiatry services; and Specialty 1, a Houston-based provider of Specialty Dental services.

“As a firm we understand how to set up a managed services organization, and how to centralize certain functions such as finance, marketing, human resources. We also help to source and execute add-on acquisitions,” he said. “We have utilized this strategy for our physician practice management portfolio companies. Additionally, the flexibility of our structured capital mandate sets us apart from other firms.”