Healthcare M&A Optimism in 2025: 5 Key Notes
Healthcare mergers and acquisitions saw a slight dip of 9% from 2023 to 2024, but experts at PwC are predicting a bounce back with more deals expected in 2025. Here are five key points to keep in mind:
1. Even though there was a slowdown last year, healthcare M&A activity was still nearly 70% higher than before the pandemic. In 2024 alone, there were 1,373 healthcare deals, compared to 1,506 in 2023, 1,708 in 2022, 1,525 in 2021, 814 in 2020, and 828 in 2019.
2. Deals worth over $5 billion were not as common in 2024, with only one deal hitting that mark. In total, healthcare deals added up to $69 billion in 2024, $63 billion in 2023, $101 billion in 2022, $197 billion in 2021, $56 billion in 2020, and $88 billion in 2019.
3. A mix of factors, such as a healthy dose of available capital, potential interest rate adjustments, longer hold periods, and the business-friendly vibe expected from the new administration, are setting the stage for a promising year in 2025. Keep an eye out for the new administration’s stance on a variety of issues, from antitrust enforcement to provider reimbursements, as they will impact how investors approach deals.
4. Big healthcare systems are focusing on streamlining their portfolios and getting back to pre-pandemic financial health. Meanwhile, payers are honed in on merging vertically and expanding their reach geographically.
5. For those diving into the world of mergers and acquisitions, flexibility is key. Look to create value through innovative AI solutions and seize opportunities in areas like provider consolidation, employer-sponsored insurance programs, and technology that supports value-based healthcare.
As we gear up for more action in the healthcare M&A space in 2025, it’s clear that adaptability and strategic thinking will be key to success.
