Healthcare merger and acquisition deal volumes have remained steady despite an uncertain regulatory environment, with volumes pacing far ahead of where they were before the COVID-19 pandemic.
According to a new PwC report, there have been 445 announced transactions through May 15, bringing the value of the total number of deals over the past few months to $64 billion. The one announced megadeal (deals greater than $5 billion), at $17.9 billion, was the Walgreens Boots Alliance/Sycamore deal, which contributed about 28% of all disclosed value.
WHAT'S THE IMPACT
Looking at last-twelve-month (LTM) deals, the most number of deals, at 474, were in "other services," which includes contract research organizations, ambulatory surgical centers, hume infusion and medical office buildings. That category accounted for more than $31 billion in value. Following are physician groups ($11.3 billion) and labs/diagnostics ($7.6 billion).
Investor interest in autism, addiction and outpatient psych platforms has reignited. In the first quarter of 2025, behavioral health deal flow jumped over 35% year-on-year, with autism deals doubling to the highest quarterly count since 2020.
Across seven subsectors – home health/hospice, labs/imaging/pharmacy, skilled nursing facilities/assisted living facilities/long-term acute care hospitals, outsourcing, ambulatory care/rehab/dental, managed care and acute care – there's been some EBITDA multiple compression compared to May 2024. (Multiple compression is the decline in the valuation multiple that investors are willing to pay for a company or asset.)
Managed care companies now trade about 19% lower than a year ago due to higher medical-loss-ratio prints and political noise around mergers and acquisitions overpayments, authors said.
THE LARGER TREND
Mergers and acquisitions in Q1 reflect market volatility and economic uncertainty surrounding tariffs and potential policy changes from the new administration, a Kaufman Hall analysis found in April.
The firm described the result as a "chill" on healthcare decision-making.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.