Healthcare Mergers and Acquisitions: Key Highlights from 2025

The healthcare industry in 2025 has been a dynamic landscape for mergers and acquisitions (M&A), driven by technological advancements, regulatory shifts, and the pursuit of value-based care. Despite challenges like tightened regulatory scrutiny and economic pressures, M&A activity remained resilient, with a focus on innovation, digital health, and strategic consolidation. Below are the key highlights shaping the healthcare M&A landscape in 2025.

1. Surge in Technology-Driven M&A

The integration of technology, particularly artificial intelligence (AI), telehealth, and data-driven care models, has been a major catalyst for M&A activity. Companies are targeting scalable health tech platforms to enhance automation, interoperability, and patient-centric care. Notable deals include:

• Bain’s Acquisition of HealthEdge (April 2025): Bain acquired HealthEdge, a SaaS platform connecting health plans, providers, and patients with digital solutions, reflecting private equity’s (PE) growing interest in capital-light, scalable assets.
• New Mountain Capitals’ AI-Driven Platform (May 2025): New Mountain Capital combined three health tech companies to create an AI-driven revenue cycle management platform, automating hospital administrative workflows.
• Actigraphy’s Acquisition of Biofourmis’ Life Sciences Unit: This deal expanded Actigraphy’s capabilities in remote patient monitoring and digital biomarkers, supporting decentralized clinical trials.

These transactions underscore a shift toward “how we care” models, where digital capabilities enable prevention, early intervention, and patient self-management.

2. Private Equity’s Expanding Role

Private equity firms have been key players, focusing on technology-enabled services, specialty physician practices, and pharmaceutical sectors. Despite a 9% decline in health services deal volume from 2023 to 2024 (1,373 deals in 2024 compared to 1,506 in 2023), PE activity remained robust, particularly in medtech and digital health. Examples include:

• KKR’s 50% Stake in Cotiviti: A significant investment in healthcare IT, highlighting PE’s focus on innovation-driven assets.
• Thoma Bravo’s Sale of NextGen Healthcare: A secondary transaction to Madison Dearborn Partners, showcasing the use of continuation funds to generate liquidity while preserving upside for high-conviction assets.

PE firms are competing with strategic buyers for health tech and AI-driven diagnostics, driven by the need to hedge against reimbursement uncertainties and capitalize on scalable platforms.

3. Regulatory Scrutiny and Antitrust Challenges

Regulatory oversight, particularly from the Federal Trade Commission (FTC), intensified in 2025, targeting deals in consolidated markets. High-profile cases include:

• UnitedHealth Group’s Blocked Acquisition of Amedisys: The Department of Justice blocked this $3.3 billion deal, citing concerns over reduced competition impacting patients, insurers, and nurses. The deadline for closure was extended to December 31, 2025, or 10 days post a final court decision.
• Union Health and Terre Haute Regional Hospital: This merger was withdrawn in November 2024 after FTC opposition, due to potential cost increases and negative impacts on healthcare outcomes.

These challenges highlight the need for healthcare organizations to demonstrate clear benefits, such as improved patient care and cost efficiency, to navigate regulatory hurdles.

4. Hospital and Health System Consolidation

Financial distress continued to drive hospital and health system M&A, with 72 transactions announced in 2024, trending toward pre-pandemic levels. Over 30% of these involved financially distressed parties, with the average revenue of distressed entities reaching $401 million. Key trends include:

• Regional Mergers: Northwell Health and Nuvance Health combined to form a 28-hospital system across New York and Connecticut, reflecting a focus on regional scale.
• Summa Health and HATCo: Summa Health’s acquisition by General Catalysts’ Health Assurance Transformation (HATCo) in November 2024 aimed to enhance technology-driven care delivery.

Hospitals are consolidating to address financial strains and invest in outpatient expansion, though regulatory scrutiny remains a significant barrier.

5. Pharmaceutical and Life Sciences Megadeals

The pharmaceutical and life sciences sector saw a decline in deal volume (18%) and value (31%) in 2024, but 2025 is poised for larger “megadeals.” Notable transactions include:

• Novo Holdings’ $16.7 Billion Acquisition of Catalent: The largest deal of 2024, focusing on contract manufacturing.
• AbbVie’s $10.1 Billion Acquisition of ImmunoGen: A strategic move to bolster its oncology portfolio.
• Merck Kagan’s Talks with SpringWorks Therapeutics: Ongoing discussions to expand its oncology pipeline.

These deals reflect a focus on innovation-driven investments in specialized treatments and AI-integrated solutions.

6. Retail Pharmacy Transformation

The closure of retail pharmacies has created new M&A opportunities, with providers repurposing sites into urgent care centers and specialty clinics. This trend addresses care access gaps in urban and suburban areas, driving demand for medical office buildings (MOBs) and ambulatory surgery centers (ASCs).

7. Focus on Value-Based Care

The push for value-based care and risk-based reimbursement models is reshaping M&A strategies. Healthcare leaders are prioritizing acquisitions that align with long-term goals of growth, efficiency, and improved patient outcomes. Cultural integration and strategic clarity remain critical to successful deals.

Outlook for 2025

Despite headwinds like rising interest rates and inflation, PwC analysts are optimistic about increased M&A activity in 2025, fueled by a pro-business administration and demand for technology-driven solutions. The convergence of private equity, digital innovation, and value-based care will create a high-stakes, high-opportunity environment. Healthcare M&A in 2025 is not just about scale but about building smarter, more connected systems that prioritize patient-centric care.

For more insights, healthcare leaders and investors should stay informed on regulatory developments and focus on strategic partnerships that drive innovation and efficiency. The future of healthcare delivery is being shaped by those who can navigate these complexities and seize emerging opportunities.