Leisure and wellness update – Fall 2019

KPMG Corporate Finance LLC’s in-depth examination of the medical spa and massage therapy markets

Philip J. Isom

Philip J. Isom

Principal, Global Head of M&A, KPMG Corporate Finance LLC

+1 312-665-1911


Medical spa and massage therapy is ripe for M&A activity

Across the United States, medical spas and massage therapy locations are gaining popularity and they’re growing rapidly as consumers seek out alternative forms of healthcare. Given the highly fragmented nature of this market, both strategic and financial investors are  making investments in these spaces.

U.S. medical spa landscape

Medical spas are a convergence of traditional day spas and medical clinics. They’re increasing in popularity as both men and women  seek treatments and services that enhance their appearance. Medical spas, (“med spas” or “medispas”), offer day spa services like  facials and waxing along with noninvasive, cosmetic dermatological and surgical treatment including laser and light-based therapies,  and cosmetic Botox and fillers.

They offer consumer the benefit of a spa-like experience while receiving procedures and treatments that are traditionally found in a  licensed doctor’s office. While not every procedure is conducted by licensed healthcare professionals, they are usually performed under  their supervision while estheticians handle the more routine day spa therapies.

Demographic profile of medical spa customers(1)


Females make up the majority of medical spa clients.

However, with mounting interest of men in improving their appearance, industry players are now focusing on making their facilities more male-friendly and investing in marketing initiatives targeted at men.



Most of the medical spa  clients are middle-aged; ~30%  of them are Baby Boomers  and ~17% are Millennials.

35-54 years  52%
55+ years 30%
17-34 years 17%
Other 1%

Medical spas – by region(1)

Growth in the medical spa market

The U.S medical spa market has grown rapidly and is currently  worth close to $4 billion. From 2013-2018, the number of medical  spas increased by CAGR of 16.6 percent. This is due to an  increase in disposable income, a growing contingent of younger  clients, new technology, and desire among consumers to avoid surgery. Baby boomers, trying to retain their youth, make up the  majority of spa customers, but future growth is expected to come  from millennial consumers.

Factors driving growth:

  • Technology is boosting industry growth. Advancements  in nonsurgical treatments have increased availability and  affordability.
  • Demand for treatments that make people look and feel  better. Botox injections, laser resurfacing, and body  contouring align to these needs.
  • Social media influencers are lessening the stigma around  cosmetic treatments. Online videos of procedures and  treatment feedback are helping these offerings become more  mainstream.
  • More than a medical spa. To create consumers for life and  increase revenues, medical spas are now selling skincare  products that boost the results of the treatments they  provide.

Revenue breakdown – By offerings(1)

Representative key industry players



Beverly Hills

Rejuvenation Centre


Ideal Image



Kalologie 360


Ideal Image



Sona Dermatology
& MedSpa


Med Spa

U.S. medical spa market – an overview

Growth in the massage therapy market

As more Americans seek out massage services, the market is  expected to grow in the coming years. The U.S. massage therapy  market was estimated to be valued at $18 billion in 2018, growing  at a CAGR of 8.9 percent from 2010-18. 19 percent of adult  Americans received at least one massage between July 2017 and July 2018, and 31 percent received a massage in the last five years.

Factors driving growth:

  • Millennials. This group has a strong earning potential and  makes up a significant and stable market for massage  services.
  • Health benefits. The benefits of massage therapy in treating  a variety of symptoms and conditions are becoming more  accepted.
  • Preventive care. As consumers seek to lower their healthcare  costs, preventive measures are increasing in popularity. Consumers are using alterative care therapies like massage  therapy, medication, yoga and relaxation to relieve stress and  perform self-care.
  • Hospitals and medical centers are also promoting these  therapies by building luxurious, spa-like wellness centers for  mind-body healing.

Locations where consumers got a massage in 2018(1)


Massage Therapist’s Office 38% Physical Therapist’s Office 11%
Spa 33% Beauty Salon 10%
Hotel/Resort/Cruise 19% Workplace 7%
Home 19% Health Club 6%
Massage Therapy Chain 19% Alternative Therapy Clinic 4%
Chiropractor’s Office 16% Hospitals 1%
Medical Clinic 11% Massage School Clinic 1%

Market segmentation – By type

Primary reason people received massage in 2018 was for health and wellness(1)


Leisure & Wellness M&A

Overall deal volume increased by 1.6 percent in 1H’19 to reach 25,404 compared to 1H’18. Disclosed deal value saw a decline of approximately 2.4 percent over the same period to approximately $1.86  trillion. Deal making in the U.S. L&W industry sustained its momentum, outpacing the previous quarter both in  terms of deal volume and value.

Factors that are impacting deal making in the United States include trade tensions, persistent qualms  about the future of Brexit and increasingly delicate global economic growth. Nonetheless, large U.S.-based companies continue to take advantage of opportunities created by supportive financials markets to negotiate  transformational deals in Q2’19.

M&A activity in the global L&W industry increased in the second quarter of the year, both in terms of volume  and value. Disclosed deal value witnessed a significant improvement on a quarter-over-quarter basis, supported  by the announcement of some large deals.

L&W deal activity in the U.S. increased by ~29%, with 99 deals in  Q2’19, compared to 77 deals in Q2’18. The U.S. contributed 43%  to the global deal volume in Q2’19, compared to 40% in Q2’19.



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