Healthcare M&A activity slowed in Q1 2025, totaling 1,156 closed transactions (LTM), down from 1,323 a year earlier. Strategic buyers led the charge, accounting for 85.6% of deals, with continued focus on clinical services, diagnostics, and digital health. Private equity remained active in niche platforms but approached valuations more conservatively. Median TEV/EBITDA fell to 13.3x from 14.8x, and TEV/Revenue to 3.20x from 3.93x, signaling a broader shift in buyer preferences toward proven margin durability and scalable models. Below, we explore key transactions, geographic distribution, and emerging trends shaping the Healthcare M&A landscape.1
Macroeconomic headwinds and tighter financing conditions continued to temper deal flow. Revenue-focused platforms faced greater valuation pressure, as median TEV/Revenue dropped by 19% YoY. While EBITDA multiples also compressed, buyers remained engaged in sectors demonstrating cost-efficiency, reimbursement stability, or exposure to outpatient and home-based care—areas viewed as lower-risk amid the evolving healthcare delivery landscape.1
Strategic Acquirers: Dominated the Healthcare M&A market with 990 deals (87.4% of total), pursuing growth in specialized therapeutic areas, precision medicine, and digital health solutions. Notably, Cencora’s $5.1B acquisition of Retina Consultants highlights strategic interest in specialty healthcare providers.
Financial Buyers: Closed 143 deals, actively investing in niche healthcare segments with scalable platforms. Transactions like Ampersand and GHO Capital's $1.07B buyout of Avid Bioservices underscore private equity’s appetite for targeted growth investments.1
While overall healthcare M&A volume declined 13% YoY, the sector remains more active than others with greater consumer or interest-rate sensitivity. TEV/EBITDA multiples fell to 13.3x—still elevated relative to most industries, though below the 14.8x seen in Q1 2024. Compared to more volatile sectors, healthcare continues to attract capital due to its essential service profile and embedded demographic demand.1
Top U.S. States: California (134 deals), Texas (64), and Florida (87) led Healthcare M&A, driven by robust provider networks, favorable demographics, and concentrated innovation hubs.1
Cross-Border Trends: Foreign acquirers, including Roche’s $1.54B purchase of Poseida Therapeutics, actively pursued U.S. healthcare targets to diversify product pipelines and mitigate global market risks.
| Target | Buyer | Value ($mm) |
| Retina Consultants of America | Cencora, Inc. | $5,100.00 |
| Inari Medical, Inc. | Stryker Corporation | $4,810.00 |
| Medicare Advantage & Supplemental Businesses (Cigna) | Health Care Service Corporation | $3,300.00 |
| The GI Alliance Management, LLC | Cardinal Health, Inc. | $2,800.00 |
| Target | Buyer | Value ($mm) |
| Poseida Therapeutics, Inc. | Roche Holdings, Inc. | $1,540.00 |
| IDRX, Inc. | GSK plc | $1,150.00 |
| Revance Therapeutics, Inc. | Crown Laboratories, Inc. | $878.00 |
| Ambry Genetics Corporation | Tempus AI, Inc. | $598.00 |
| Target | Buyer | Value ($mm) |
| Avid Bioservices, Inc. | Ampersand Management LLC; GHO Capital Partners LLP | $1,070.00 |
| Portfolio of Skilled Nursing Facilities (TN & AL) | CareTrust REIT, Inc. | $500.00 |
| Singular Genomics Systems, Inc. | Deerfield Management Company, L.P. Series C | $106.00 |
| AMOpportunities, Inc. | Cerberus Capital Management, L.P.; Newland Realty Capital | $67.00 |
Source S&P Capital IQ as of 4/17/2025 and PCE Proprietary Data
Key trends shaping Healthcare M&A:
Opportunities: A more business-friendly regulatory environment and declining interest rates are fostering optimism for increased M&A activity in digital health and specialty care sectors. This is evidenced by digital health startups raising $3 billion in Q1 2025, signaling robust investor interest.2
Risks: Despite these positive trends, persistent regulatory scrutiny, particularly at the state level, and potential policy shifts continue to pose challenges to deal closures. This necessitates thorough due diligence and robust compliance strategies to navigate the complex regulatory landscape.
Predicted Activity: A resurgence in M&A is projected, driven by strategic acquisitions in technology-enabled services and the need for healthcare organizations to adapt to evolving patient care models.7
David Jasmund |
Jon Gogolak |
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Data Assumptions This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only. Glossary EBIT - Earnings Before Interest and Taxes Sources:
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