Healthcare M&A activity continued to normalize in Q2 2025, with 1,106 transactions closed over the last twelve months, a significant decrease from 1,320 in the prior year. Strategic buyers dominated the landscape, executing 86.3% of deals, with a focus on acquiring novel therapeutics and expanding service platforms. The quarter was marked by Johnson & Johnson's mega-deal for Intra-Cellular Therapies at $14.7 billion, highlighting big pharma's aggressive pursuit of innovative assets. Valuation multiples compressed, with the median TEV/EBITDA multiple declining to 12.37x from 14.78x. This shift indicates that buyers have become more selective, influenced by tougher financing landscape and closer examination of deals by regulators.1
The 16% year-over-year decline in deal volume reflects a market recalibration after the record highs of previous years. While overall volume is down, the value of transactions remains robust, driven by large-scale pharmaceutical and medtech acquisitions. The normalization of valuation multiples indicates that buyers are putting greater emphasis on profitability and near-term revenue synergies, a shift from the growth-at-all-costs mindset that previously characterized the market.
Strategic Acquirers: With 955 deals (86.3%), strategic buyers were focused on pipeline replenishment and portfolio expansion. Johnson & Johnson's acquisition of Intra-Cellular Therapies and Novartis's $3.1 billion deal for Anthos Therapeutics demonstrate a clear strategy to acquire late-stage assets in high-growth areas like neuroscience and cardiology.1
Financial Buyers: Accounting for 129 deals (11.7%), financial sponsors were active in provider services and medical device sectors. Patient Square Capital's $3.6 billion acquisition of Patterson Companies, a leading distributor of dental and animal health products, highlights private equity's continued interest in building scale within fragmented healthcare distribution and services markets.1
While Healthcare's 16% decline in deal volume is notable, the sector remains one of the most active for M&A globally. Unlike more cyclical industries, healthcare M&A is driven by non-discretionary factors like patent expirations and the constant need for innovation. The presence of mega-deals in pharma contrasts with smaller, more fragmented dealmaking in other sectors, underscoring the unique, high-stakes nature of healthcare consolidation.
Top U.S. States: M&A activity was heavily concentrated in established hubs for healthcare innovation and services. California (146 deals), Florida (74), and Texas (65) led the nation, driven by the high density of biotech firms, large hospital systems, and physician practices in these states.1
Cross-Border Trends: The quarter saw notable cross-border activity, with European pharmaceutical giants like Novartis (Switzerland) and medical device companies like Zimmer Biomet (U.S.) making significant acquisitions to strengthen their global portfolios and access new markets.
| Target | Buyer | Value ($mm) |
| Intra-Cellular Therapies, Inc. | Johnson & Johnson Innovative Medicine | $14,654.64 |
| Patterson Companies, Inc. | Patient Square Capital, LP | $3,642.45 |
| Anthos Therapeutics, Inc. | Novartis AG | $3,100.00 |
| Community Oncology Revitalization | US Oncology, Inc. | $2,490.00 |
| CentralReach, LLC | Roper Technologies, Inc. | $1,850.00 |
| Paragon 28, Inc. | Zimmer Biomet Holdings, Inc. | $1,350.45 |
| Target | Buyer | Value ($mm) |
| North Coast Medical Supply, LLC | Cardinal Health, Inc. | $1,100.00 |
| Evergreen Theragnostics, Inc. | Lantheus Medical Imaging, Inc. | $1,002.50 |
| Chimerix, Inc. | Jazz Pharmaceuticals plc | $830.60 |
| Accolade, Inc. | Transcarent, Inc. | $861.77 |
| Target | Buyer | Value ($mm) |
| bluebird bio, Inc. | The Carlyle Group Inc.; SK Capital Partners | $315.21 |
| GetixHealth, LLC | H.I.G. Capital, LLC | n/a |
| Tyber Medical, LLC | Montagu Private Equity LLP | n/a |
Source S&P Capital IQ as of 7/2/2025 and PCE Proprietary Data
Opportunities: Expect continued high-value acquisitions in the biopharma space as companies face significant revenue losses from patent expirations. The convergence of tech and healthcare will also drive deals, with a focus on companies leveraging AI and data analytics to personalize care and manage chronic conditions.
Risks: Increased antitrust enforcement from the FTC and DOJ remains a significant risk, potentially delaying or blocking large-scale mergers, particularly among competing health systems or service providers. The uncertain reimbursement landscape for new technologies and drugs could also impact valuations and deal certainty.
Predicted Activity: Private equity will continue to be a major force, both in platform acquisitions of provider-based businesses and take-private transactions of publicly traded healthcare companies. We also anticipate a rise in carve-outs and divestitures as large corporations streamline their portfolios to focus on core growth areas.4
David Jasmund |
Jon Gogolak |
Bradley Scharfenberg |
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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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